BFSG Blog

Financial Resources & News

New Qualified Charitable Distribution (QCD) Rules

As we stand waist-deep in tax season, most Americans are scouring the earth looking for legal ways to reduce their tax bill or increase their refunds before they file their taxes. It seems like this scouring has become more voracious as time goes on and is probably correlated to the overwhelmingly negative U.S. Congressional Job Approval highlighted below. This mindset most likely explains why...

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Understanding the Net Investment Income Tax

If your income hits a certain level, you may face an additional wrinkle in calculating your taxes: the net investment income tax (also referred to as the unearned income Medicare contribution tax). This 3.8% Medicare tax applies to some or all of your net investment income if your modified adjusted gross income (MAGI) exceeds certain thresholds. The tax is in addition to any other income tax...

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Financial Planning Tips for Early Career Professionals

For most people, their 20’s are a very exciting chapter in their life, marked by career beginnings and a deeper understanding of personal goals. However, it can also be a very challenging period, with ballooning student loan payments, higher housing, and food expenses. Many resort to credit cards or move back with their parents to make ends meet. Unfortunately, our education system has done a...

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Monthly Market Update (February 2024): 3 Things You Need to Know

Several all-time highs were achieved by the major equity indices in price during February. That included an all-time high for the Nikkei, surpassing its previous record from 1989, and the S&P 500 also broke through the 5,000 mark. Here are 3 things you need to know: The Magnificent 7 (+12.1%) powered the U.S. equity gains, posting their best performance in 9 months and now +14.1% YTD....

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There’s Still Time to Fund an IRA for 2023

The tax filing deadline is fast approaching, which means time is running out to fund an IRA for 2023. If you had earned income last year, you may be able to contribute up to $6,500 for 2023 ($7,500 for those age 50 or older by December 31, 2023) up until your tax return due date, excluding extensions. For most people, that date is Monday, April 15, 2024. You can contribute to a traditional IRA,...

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Tax Season News and Survival Tips

It's not easy to keep up with complex tax laws that always seem to be changing, much less figure out how they might affect you personally. Even so, it's important to consider the potential impact of taxes when making many types of financial decisions. The IRS automatically adjusts the standard deduction and income tax brackets annually for inflation. The rate of inflation rose to 40-year highs...

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Financial and Investment Products You Should Avoid

When it comes to trustworthy professions, what professions would you typically think of? Take a second to think about some professions. Ok. What professions did you come up with? What might be top of mind for you could be “doctor”, “accountant”, or maybe “firefighter”. Much to my chagrin, I doubt that “financial advisor” came up for you during this thought exercise. Don’t feel bad, I’m used to...

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Basics of Valuing Alternative Investments

More than ever, we are seeing individuals begin to show more interest in investing in alternative investments. Alternative investments can be hard to define but for the sake of this article, we will focus on Private Equity, Real Estate investments, and other non-traditional investing options. These investments are more complex than traditional investments like stocks and bonds and are therefore...

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Upcoming Compliance Deadlines

February 2024 28th:  IRS Form 1099-R Copy A – Deadline to submit Form 1099-R Copy A to the IRS for participants and beneficiaries who received a distribution or a deemed distribution during the prior plan year. This deadline applies to scannable paper filings. For electronic filings, the due date is April 1, 2024, as the typical March 31 deadline falls on a weekend. March 2024 15th:...

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Reminder: Long-Term, Part-Time Employee Rules Effective January 1, 2024

As part of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), part-time employees who worked at least 500 hours each year in 2021, 2022, and 2023 qualify as Long-Term, Part-Time (LTPT) employees. LTPT employees were eligible to make elective deferrals on January 1, 2024. What happens if you missed enrolling one of these employees? Mistakes happen. When it comes...

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401(k) Deferrals: Don’t Exceed The Limit!

Excess deferrals occur when a 401(k) participant defers a greater amount than the annual IRS limit permits. The annual deferral limit was $22,500 for 2023 and $23,000 for 2024. For participants 50 years old and older, an additional $7,500 can be deferred. When this limit is exceeded, excess deferrals and earnings need to be removed from the plan and returned to the participant. Employer matching...

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Components of Defined Contribution Plan Compliance Testing

Save More for Retirement in 2024 Plans must be tested each year to ensure that they are compliant with the laws governing retirement plans. To understand the testing performed for your plan, it may be helpful to review some of the terms that are commonly used. First, let’s examine how your plan’s noteworthy individuals are identified. Highly Compensated Employees (HCE): There are two...

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Does My Plan Need an Audit?

The main determining factor in whether your plan needs an audit performed by an independent qualified public accountant is the participant count. An audit will be required if the beginning of year participant count is more than 100. For the plan year that began in 2023, there is a change to how the participants are counted. Prior to this, the count included active participants—regardless of...

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Markets in Review

Equity markets rebounded in the fourth quarter 2023 with the S&P 500 Index1 up 11.7%, and finishing the year up 26.3%. This was a welcome performance after the steep declines experienced in 2022 as the Federal Reserve was battling high inflation. Inflation figures fell to tolerable levels during the year and the Federal Reserve paused their interest rate hiking cycle, with the potential to...

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The Corporate Transparency Act: New Reporting Requirement for Small-Medium Sized Businesses

On January 1, 2024, the Corporate Transparency Act (“CTA”) comes into effect, requiring more than 30 million small and medium sized businesses to report ownership information to the Financial Crime Enforcement Network (a unit of the Department of Treasury, known as FinCEN). The CTA is designed to enhance transparency into entity structures and to fight money laundering, tax fraud, the financing...

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