Tag: Taxes

2023

Written by support@seostats.com on October 31, 2022. Posted in Newsroom.

Number to Keep in Mind When Planning for 2023

Presented by The PensionmarkMeridien Team,

New Tax Brackets and Deductions:

Amid historic (and stubborn) inflation, the IRS has announced higher federal income tax brackets and standard deductions for 2023. The announcement may mean savings for Americans in all income brackets — welcome news as rent, gas, and grocery prices soar to a 40-year high ¹.

That said, here are a few key changes to note as we enter a new tax year:

Federal income tax brackets will increase by roughly 7% ², allowing taxpayers to shield more of their hard-earned income from taxation. For example, single taxpayers earning $44,726 to $95,375 will pay $5,147 plus 22% of the amount over $44,725. Married taxpayers filing jointly making $89,451 to $190,750 will pay $10,294 plus 22% of the amount over $89,450. Outside those brackets? You can find your 2023 tax bracket information here ³.
The standard deduction is increasing from $25,900 in 2022 to $27,700 for married couples filing jointly and from $12,950 to $13,850 for single taxpayers.
The earned income tax credit amount will jump to $7,430 for qualifying taxpayers⁴ with three or more children, up from $6,935 for tax year 2022.
The new IRS limit for FSA contributions for 2023 is $3,050 ⁵, an increase of 7% from 2022’s threshold of $2,850.
Taxpayers will be able to give up to $17,000 in gifts in 2023 without paying taxes, up from $16,000 in 2022.
The IRS will exempt up to $12.92 million from the estate tax, up from $12.06 million for people who died in 2022 — another increase of roughly 7%.
The tax changes come days after the government announced that millions of Social Security recipients will get an 8.7% boost ⁶ in their benefits in 2023 — an average of $140 per month.
Keep in mind that these changes are for the 2023 tax year and will have no impact on the taxes you file next March. That said, now is the perfect time to begin considering tax strategy as the 2023 tax year approaches.

New Retirement Account Limits

Then on October 21, 2022 the IRS’s announced ⁷ a change to 401(K) account limits for 2023.

401(k), 403(b), 457 plans, and Thrift Savings Plan

The amount individuals can contribute to their 401(k) plans in 2023 has increased to $22,500, up from $20,500 in 2022 ⁷.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan has increased to $7,500, up from $6,500 ⁷.
In total, participants 50 and over can contribute up to $30,000 ($22,500 + $7,500) beginning in 2023 ⁷.

Traditional and Roth IRA

The limit on annual contributions to an IRA increased to $6,500, up from $6,000 in 2022.
The IRA catch-up contribution remains $1,000 for individuals 50 (and is not subject to an annual cost-of-living adjustment) ⁷.
The income phase-out range for taxpayers making contributions to a Roth IRA has increased to between $138,000 and $153,000 for singles and heads of household, up from between $129,000 and $144,000 ⁷.
The income phase-out range has increased for married couples filing jointly to between $218,000 and $228,000, up from between $204,000 and $214,000 ⁷.

SSA and COLA

In addition to the IRS announcements the Social Security Administration (SSA) recently published a historic cost of living adjustment (COLA) for 2023.

On a yearly basis, the SSA reviews the general cost of living and makes adjustments to its benefits offerings. For the upcoming 2023 calendar year, the COLA ⁸ increased by the highest amount in over 40 years at a rate of 8.7%–a direct response to continuing white-hot inflation that hit 8.2% year-over-year in September 2022. The COLA translates into an increase from $1,680 to $1,827 for the average retired worker monthly benefit, according to the SSA ⁹ .

And thankfully, in line with the increasing COLA, beneficiaries will experience a decrease in standard premiums for Medicare Part B, which is set to fall to $164.90 ¹⁰ starting in January. Medicare Part B payments are often directly deducted from monthly SSA allotments before they reach recipients’ bank accounts.

The impact of the annual COLA has perhaps never before been more substantial, as the average increase is set to be more than $140 per month ¹¹ beginning in January 2023. This will hopefully help seniors and retirees experience some relief from the rising cost of goods and services. Historically, a COLA that fails to keep pace with inflation only serves to exacerbate financial hardships.

While this increase is good news for seniors taking social security it’s not license for those taking Social Security to change spending habits all that much–as most seniors know all too well.

For Seniors who have not taken Social Security will still reap the benefits of this increase even if they don’t take Social Security this year. (There is never a decrease in the COLA, so the higher payments are here to stay.) Keep in mind that, in some cases, it’s worth holding off taking Social Security for several years once you’re eligible. Of course, the benefits of doing so vary based on individual circumstances.

This significant increase in SSA payments could decrease the number of years through which Social Security is fully funded. Currently, the program can pay through 2035, but that could decrease by at least a year ¹² as a result of the COLA.

That said, higher wages tied to inflation could help replenish Social Security funds. And relatedly, Americans not taking Social Security will see the amount of income subject to the Social Security tax increase ¹³ this year.

Ultimately, some of the youngest workers saving for retirement don’t expect Social Security ¹⁴ to be fully available when they retire. For those like them, who are worried about Social Security’s future, we encourage you to focus on what you can control – building a retirement plan while time is on your side.

In our current inflationary environment, these changes and boosts in benefits are small but strategic ways you can mitigate inflation’s lingering impact.

Now, we understand that the changes to the COLA or retirement account limits could bring about quite a few questions, especially for those at or nearing retirement. If you or anyone in your family has questions about retirement, or you would like to discuss other ways to keep your investments on track amid a less-than-ideal market, please feel free to reach out. We are always here as a resource for you.

The PensionmarkMeridien Team may be reached at 866-871-9963 or meridienteam@pensionmark.com

This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other tax professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Investments seeking to achieve higher rate of return also involve a higher degree of risk.

Citations.

Pensionmark^® Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark^® is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).

Continued Market Upheaval & You!

Written by support@seostats.com on May 11, 2022. Posted in Newsroom.

Presented by The PensionmarkMeridien Team

The investment committee at PensionmarkMeridien has been keeping its finger on the pulse of the economy and markets and wished to share some additional thinking with you. As of Friday, May 6^th we have seen a year-to-date drop in the overall stock and fixed income markets across major indices including the S&P 500 -15.60%, Nasdaq -24.95%, Dow Jones -9.39% and the Bloomberg US Aggregate Index -10.51%. ¹

While this type of gloomy year-to-date chart can make all of us, as investors, feel overwhelmed and anxious as to where to allocate dollars, it is important to remember the longer term. Let’s take a look at these same four indices over the past three years, despite COVID-19! ²

While past performance is not a guarantee of future results, we believe in the markets and will remain invested across asset classes for you. That does not mean we will not adjust the portfolios, as there are headwinds that will require us to think more outside of the box.

Why are the markets so volatile?

The Fed has acted quickly signaling a fast rate hike cycle, which is a departure from its past decades gradual approach. Just last week the Fed increased rates by half a percentage point, which is the largest rate increase since the year 2000.³ While this move was likely necessary to combat tremendous inflation, it has caused market volatility.

Furthermore, the continuing Russian war on Ukraine has exacerbated an already impinged supply chain and impacted availability of many commodities including, energy, wheat, and fertilizer from both nations, further accelerating inflation.⁴ This in turn will further action to increase interest rates.⁵

These increases to interest rates have made 2022 the worst start to a year for bond market performance in many decades. But the good news is, with the increases to interest rates, we may finally see some better income from our bond holdings and bonds will provide more ballast at these levels if we continue to see a growth market slow-down.

What will PensionmarkMeridien’s Direction?

Fixed Income/Bonds: Across many portfolios, starting during COVID, our team has looked to shorter durations. We will continue to favor short and mid duration bond positions but have also implemented bank loan / floating rate strategies, which have also suffered, but have provided some enhanced performance over the past year. We feel such strategies should continue to prove beneficial to overall portfolio performance.

Equities: We continue to favor U.S. based equities and do not envision a change to that thinking. We acknowledge that there will be continued volatility for the growth sector, especially tech, given the rising interest environment and investor concerns about the future, which will way on valuations. We do have convictions for many of the growth and tech names that we hold individually or in mutual funds / ETFs, given many are global industry leaders with enduring business models. With that said, some positioning in the near term may include an allocation shift to consumer staples and dividend paying holdings. Given the rise to rates and inflation will affect the vast majority of US consumers and homeowners, we envision less discretionary spending for an extended period of time, with the possible exception of home improvements and leisure travel. ^{6 7}

While we were all just starting to feel some normalcy though what we hope is the end of the pandemic, we now face the most bearish investor sentiment in many decades. While there will be continued market volatility, it is important to remember that proper asset allocation, not trying to over-time the market and a long-term view related to your financial goals is your and our best chance for a successful investment result.

Please reach out to us at any time. Thank you.

The PensionmarkMeridien Team may be reached at 866-871-9963 or meridienteam@pensionmark.com

Citations:

YCharts, https://ycharts.com/stocks
YCharts, https://ycharts.com/stocks
CNBC, https://www.cnbc.com/2022/05/04/fed-raises-rates-by-half-a-percentage-point-the-biggest-hike-in-two-decades-to-fight-inflation.html
World Bank, https://blogs.worldbank.org/developmenttalk/commodity-prices-surge-due-war-ukraine
New York Times, https://www.nytimes.com/2022/05/09/us/politics/ukraine-steel-tariffs.html
National Kitchen and Bath Association https://nkba.org/insights/home-remodeling-outlook-for-2022-and-beyond/
CNBC, https://www.cnbc.com/2022/01/21/the-biggest-2022-travel-trend-go-big-spend-big-on-bucket-list-trips.html

This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.

Pensionmark® Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark® is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).

What is All This Talk About a Recession

Written by support@seostats.com on April 8, 2022. Posted in Newsroom.

In recent weeks, the word recession has started creeping into business news and financial market coverage. We have just heard from Deutsche Bank, becoming the first major bank to forecast a recession in 2023 in the U.S.¹

Is that cause for alarm or just another attention-grabbing headline? There’s no simple answer.

A recession is defined as two consecutive quarters of negative economic growth as measured by gross domestic product (GDP). But GDP is a lag indicator, so we may not know until sometime in 2023 if we lived through a recession in 2022.²

One lead indicator that has signaled a recession may be on the horizon. It’s called the yield curve.

In an expanding economy, the yield curve slopes upward to the right. But a slowdown, the curve can invert, and the yield on short-term Treasuries is higher than longer-term ones. An inverted yield curve suggests that investors have lost some confidence in the economy and have started shifting money around.

Some swear by the yield curve, pointing out that it’s inverted preceding every recession in recent memory. Others are not so certain. They explain that while today’s “nominal curve” did invert, the “real curve,” adjusted for inflation, tells a different story.

It’s not easy sorting through the economic noise these days. That’s why our team examines various indicators, including the yield curve. If we see the need for a portfolio change, we’ll explain why we are charting a new course.

Citations

1. Bloomberg, April 5th, 2022
2. Investopedia, May 17, 2021

This material was prepared by MarketingPro, Inc. for use by The PensionmarkMeridien Team.Neither Pensionmark Financial Group, LLC (“Pensionmark”) nor its advisers provide tax or legal advice. Please consult with an appropriate professional.

Inflation and Your Taxes

Written by support@seostats.com on March 16, 2022. Posted in Newsroom.

You’re probably well aware of inflation’s sting in recent months, with higher prices across the board from cars to groceries to energy. The consumer price index climbed 7.5% last year–the biggest jump in 40 years.¹

What you may not know, however, is that inflation may have an impact on your taxes in a variety of ways. That’s because lawmakers have taken a scattered approach to indexing various tax provisions for inflation over the years.

Here is how your taxes could be affected in several key areas:

Real estate. If you sold a home last year and are subject to capital gains taxes on profits, the amount before taxes kick in remains at $250,000 for single filers and $500,000 for married couples filing jointly–amounts that have not changed since the provision was enacted in 1997. Likewise, caps on state and local property, income and sales tax deductions have not budged since they were enacted in 2018. The $10,000 limit remains in place, despite rapidly appreciating property values and associated taxes. House Democrats did pass an increase to $80,000 through 2030, but it’s a provision in the currently stalled Build Back Better legislation. ^2,3
Income. Income brackets are indexed, meaning that you may not be subjected to higher rates simply because you’ve received larger-than-usual raises due to higher cost-of-living increases, pay jumps from job moves, or adjustments to a tight labor market. That helps avoid “bracket creep”—at least in federal taxes. The take-home pay of wage earners, who are making 7.3% more on average since the pandemic, may also rise because of inflation adjustments to withholding tables. The standard deduction was also adjusted upward slightly, to $25,100 for married couples, up $300 from the prior year. Married filing separately and singles get an increase of $150 to $12,550. ^{4, 5, 6, 7}
Retirement. The biggest impact inflation will have on your retirement savings may be the erosion of its value. But for those who are still saving, increases to tax-deductible contributions to retirement accounts can help. If you contribute to a 401k, it’s now tax deductible up to $20,500 for those under 50, a hike of $1,000. Contributions to traditional and Roth IRAs remain capped at $6,000 (it can only be increased in $1,000 increments).⁸

We’re here to help you navigate tax season and inflation with confidence. Let us know if you have questions about any of the information above or if there’s anything we can do to assist.

Citations:
1. U.S. Bureau of Labor Statistics, February 16, 2022,
2. Investopedia, November 27, 2021
3. CNBC, January 12, 2022
4. Investopedia, December 04, 2020
5. Tax Foundation , October 19, 2021
6. CNBC , January 7, 2022
7. IRS , October 26, 2020
8. Kiplinger , October 3, 2021

Neither Pensionmark Financial Group, LLC (“Pensionmark”) nor its advisers provide tax or legal advice. Please consult with an appropriate professional.
Pensionmark® Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark® is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).

Info Re: financial Impacts of the Ukraine Crisis

Written by support@seostats.com on March 9, 2022. Posted in Newsroom.

If you’re like me, you’ve been keeping a close eye on the news as the crisis in Ukraine continues to escalate. Above all, our thoughts go out to the Ukrainian military and citizens as they navigate this unfathomable tragedy.

You may also be wondering what the far-reaching impacts of the situation may be if the escalation continues, especially from a financial standpoint. I thought I’d pass along some insights to help you stay informed and be prepared:

Higher borrowing costs. At a minimum, the Russia-Ukraine situation may potentially further complicate the Fed’s difficult task of curbing inflation without fueling a recession. The anticipated interest rate increases ¹ will increase borrowing costs for consumers on everything from mortgages and car loans to credit cards.
Higher prices at the grocery store. Russia and Ukraine are significant exporters of wheat, rye, barley, and other grains to Central Asia and the Middle East. Further escalation would drive global food prices higher when many are already struggling to reconcile their grocery budget with checkout line sticker shock.
More pain at the pump. With Russia producing 10.5 million barrels of oil a day ², disruption in its production would send oil prices soaring, sending already-eight-year-high gas prices³even higher. If Russia responds by halting oil exports, prices could jump to $120 a barrel⁴ . In addition to pain at the pump, higher oil and natural gas prices would also drive up heating and electricity bills.
More supply chain issues. Russia produces just under half of the world’s palladium⁵ and smaller amounts of platinum and nickel—critical components in smartphones, laptops, and countless other products. Ukraine is Europe’s top producer of uranium ⁶. Any bottlenecks in production could exacerbate the semiconductor shortage and further push up the prices of cars, electronics, and other high ticket items.
Potential cyberattacks. Recalling the disruption caused by the Colonial Pipeline cyberattack ⁷ in May 2021, additional cyberattacks—especially on the U.S. financial system—are a growing concern for experts⁸ as the Russia-Ukraine plays out.
Stock market volatility. We’ve already experienced ⁹ (and are currently rebounding from) a sell-off, and investors can expect for volatility to continue as the crisis unfolds.

I know you’re already weary from the pandemic and rising inflation. Unfortunately, the Russia-Ukraine crisis is one more factor to watch. Please know that the team and I will be here to help you and your family weather its economic effects.

Citations

BankRate, February 18, 2022
S&P Global Commodity Insights, January 2, 2022
CBS News, February 15, 2022
Fortune, February 22, 2022
Reuters, October 18, 2021
Home Security Today, February 20, 2022
Bloomberg, June 4, 2021
Reuters, February 22, 2022
USA today, February 25, 2022

Inflation and Your Taxes

Written by support@seostats.com on March 7, 2022. Posted in Newsroom.

You’re probably well aware of inflation’s sting in recent months, with higher prices across the board from cars to groceries to energy. The consumer price index climbed 7.5% last year–the biggest jump in 40 years.

Here is how your taxes could be affected in several key areas:

Real estate. If you sold a home last year and are subject to capital gains taxes on profits, the amount before taxes kick in remains at $250,000 for single filers and $500,000 for married couples filing jointly–amounts that have not changed since the provision was enacted in 1997. Likewise, caps on state and local property, income and sales tax deductions have not budged since they were enacted in 2018. The $10,000 limit remains in place, despite rapidly appreciating property values and associated taxes. House Democrats did pass an increase to $80,000 through 2030, but it’s a provision in the currently stalled Build Back Better legislation. ^2,3
Income. Income brackets are indexed, meaning that you may not be subjected to higher rates simply because you’ve received larger-than-usual raises due to higher cost-of-living increases, pay jumps from job moves, or adjustments to a tight labor market. That helps avoid “bracket creep”—at least in federal taxes. The take-home pay of wage earners, who are making 7.3% more on average since the pandemic, may also rise because of inflation adjustments to withholding tables. The standard deduction was also adjusted upward slightly, to $25,100 for married couples, up $300 from the prior year. Married filing separately and singles get an increase of $150 to $12,550. ^{4, 5, 6, 7}
Retirement. The biggest impact inflation will have on your retirement savings may be the erosion of its value. But for those who are still saving, increases to tax-deductible contributions to retirement accounts can help. If you contribute to a 401k, it’s now tax deductible up to $20,500 for those under 50, a hike of $1,000. Contributions to traditional and Roth IRAs remain capped at $6,000 (it can only be increased in $1,000 increments).⁸

We’re here to help you navigate tax season and inflation with confidence. Let us know if you have questions about any of the information above or if there’s anything we can do to assist.

Citations

1. U.S. Bureau of Labor Statistics, February 16, 2022,
2. Investopedia, November 27, 2021
3. CNBC, January 12, 2022
4. Investopedia, December 04, 2020
5. Tax Foundation , October 19, 2021
6. CNBC , January 7, 2022
7. IRS , October 26, 2020
8. Kiplinger , October 3, 2021