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Your Mid-Year Financial Check-In

Keeping an eye on your financial health and investment performance is essential for staying on track for meeting your financial goals. To stay up to date, it’s important to schedule regular meetings with your financial advisor – and a mid-year meeting may be just the right place to start.

As summer comes to a close, it’s an ideal time for a financial tuneup. In addition to any personal questions and concerns you may have concerning your portfolio, here are some areas to check on when you meet with your financial advisor.

Review Your Investments

The only thing that’s certain about your investment portfolio is that it will always be changing. Over time and as markets fluctuate, certain investments may perform better than others. To stay on course with your financial benchmarks, you need to keep track of how your investments are performing.

Your financial advisor can help you monitor portfolio performance and provide direction when you have questions or concerns. If you decide it’s time to take a different approach to your investment mix, your advisor can help you explore different options that might make sense for your situation.

Take a Look at Your Tax Obligations

It’s a good idea to take a mid-year review of your tax obligations and formulate a tax strategy before you file next tax season. A financial professional can provide the guidance you need to review your situation and try to avoid any surprises once the new year rolls around.

As you work through your tax strategy, you will want to review your lifestyle and income to see whether there are any factors that could impact your potential tax return. Factors like a career change, a new home, or retirement could make a big difference when it comes time to file.

Mid-year is also an ideal time to tweak your strategy in order to offset your tax liability. You can defer funds to charitable giving and retirement investing or look into other strategies in seeking to maximize your potential return.

Make Adjustments as Necessary

Likely, after reviewing your income, investments, tax liability, and other factors, you’ll probably have some questions. Perhaps you’ll feel the need to make an adjustment here or reconsider an investment there.

Your financial advisor is the ideal partner for working through these mid-year changes. Not only can your advisor help you to work through paperwork and get into the details of your specific portfolio, but they can also provide professional guidance to interpret how your financial activity aligns with your financial goals and benchmarks.

By taking advantage of periodic check-ins – such as the mid-year meeting -, you can keep a finger on the pulse of your financial performance and hopefully avoid major surprises. Even when unexpected events occur, your advisor can help you navigate the outcome by bringing a more neutral perspective to balance any emotionality you might be tempted to act upon.

Are you ready for your mid-year financial check-in? Contact Puckett & Sturgill Financial Group today to schedule a consultation.

Can I Do A Qualified Charitable Distribution from My IRA?

If you’re looking for ways to use your IRA funds, you may consider a Qualified Charitable Distribution (QCD) as a way to meet your required minimum distribution (RMD).

Outside of the good feeling that comes from contributing to a worthy cause, one of the main benefits of a QCD is that it allows you to exclude the amount donated from your taxable income. Additionally, this amount doesn’t require itemization, which can bring a bit of relief to your overall numbers come tax time.

Of course, not all IRAs and investors qualify for QCD contributions. Read on to learn whether your situation is ideal for a QMD.

Qualifying IRAs

In order to make a charitable distribution with your IRA funds, your IRA needs to fall into one of the following categories:

  • Traditional IRA
  • Inherited IRA, including inherited Roth IRA
  • SEP IRA
  • SIMPLE IRA

Additionally, you need to be above the age 70.5 at the time that you plan to make a charitable distribution and, in the case of SEP or SIMPLE IRAs, must be no longer receiving employer contributions in order to qualify.

Giving Limits

While giving away your funds in the form of QCDs is a strategic way to meet your RMD, enjoy accompanying tax benefits, and benefit from giving to charity you cannot exceed a certain giving threshold. For couples, the QCD cannot exceed $200,000; for singles, the QCD must remain under $100,000.

Qualifying Charities

Charitable distributions are intended to be just that: charitable.

In order to verify the eligibility of a recipient organization, your QCD recipient must not be a private foundation or donor-advised fund. In general, most 501(c)(3) organizations qualify to receive QCDs. If you have a question about a particular charity, consult a financial professional to learn whether it qualifies for your donation.

Working Through the QCD Process

Once you’ve got an approved charity and know that your IRA funds are eligible for distribution, you’ll begin the QCD process to release the funds to the charity of your choice. Here’s how the process works:

Step One: Coordinate with Your RMD

You will want to distribute funds to a charity through QCD during the same year as your RMD. Ensure that you establish the proper timing for this distribution to coincide with your RMD in order to avoid penalties for missing your applicable deadlines or withdrawal requirements.

Step Two: Communicate with Your IRA Custodian

Your IRA custodian can help you to put your QCD plan into action, but there is some information that you need to communicate to get the process started. You need to submit your request in writing and need to specify the dollar amount you’d like set aside for QCD. Additionally, you should request this check be made payable to your charity of choice but mailed to you.

Step Three: Send the Funds to Your Chosen Charity

Once you receive the check, you can then forward it to the charity you’ve chosen. When you send the check, be sure to request a receipt so that you can update your tax records accordingly.

Step Four: Keep Your Tax Info Straight

When you file taxes for the year of your QCD, you will need to report the donation on your 1040 form. You can enter the donation amount on line 15a and put $0 for line 15b. Take care to note QCD.

Planning for Retirement

Whether you’re setting up an IRA or want to learn more about your options for taking your RMD, a financial advisor can offer personalized support for working through your retirement strategy. Contact Certified Financial Planner Jacob Sturgill to learn about how retirement planning can help you make the most of your future.

Important Disclosures:
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.