Worcester Business Journal

18 Worcester Business Journal | November 12, 2018 | wbjournal.com W 10) Track your worth. Take an inventory of your assets (and liabilities) to create a clear picture of your net worth and consider using aggregation software to track it over time. 9) Don't miss your window. It's open enrollment season, so take the time to select the right health insurance plan for 2019 by weighing out costs and benefits. Consider utilizing tax-advantaged health savings vehicles such as the health savings account. 8) Insure your paycheck. Confirm you have adequate long-term disability insurance to protect your future earnings. 7) Shift your allocation. Consider a contrarian approach to your investments by taking advantage of beaten-down asset classes such as emerging market stocks, gold and energy master limited partnerships. 6) Don't leave money on the table. Ensure your group retirement plan contributions are taking advantage of any company match. 5) Shop it out. Given interest rate increases, now is a smart time to look for more competitive rates on bank deposits, CDs and money market accounts. Ask your bank if you're eligible for an increase. 4) Save your accountant from surprises. Provide your tax preparer with an estimate of capital gains and investment income to save you from an unexpected tax bill. Be aware of any capital gain distributions made from mutual funds in non-retirement accounts. 3) Remember your Roth. Roth IRAs can provide tax-free accumulation and distributions, and their appeal has grown given the recent federal tax cuts. 2) Keeping score. Visit www. annualcreditreport.com to obtain free credit reports to identify any issues. Credit cards can help track FICO scores. 1) Call on your confidence. Be your own advocate and ask more questions of the professionals in your life. Financial health is improved by understanding where you are in relation to where you want to be. Do your own research to gain a base understanding and use your advisors as resources to build a plan, scheduling periodic reviews. 10 T H I NG S I know about . . . High-impact personal finance moves By Ryan Kittredge Ryan Kittredge is a partner and financial planner with Carr Financial Group in Worcester, and can be reached at ryan@ carrfinancial.net. K N O W H O W Where did my charitable deduction go? 10 1: S E E K I N G A D V I C E W hen the federal Tax Cuts and Jobs Act was passed in December, the oen- rumored-to-be-cut charitable contribution deduction survived. However, the effectiveness of traditional charitable giving for many was greatly reduced or eliminated. Nonprofit organizations are fearful the contributions they depend on to operate and allow them to serve the greater good will begin to dry up. e Washington, D.C. think tank American Enterprise Institute estimates we will see a $17.2-billion decrease in annual charitable giving due to the increase of the standard deduction. Taxpayers believe with the expansion of the standard deduction they will have to increase their annual charitable contri- butions by thousands to see any benefit. For some that may be true, but many can continue to benefit from their usual charitable contributions by implement- ing the following strategies. Do you own stock? If you own stock or a mutual fund that has appreciated in value over time, you can contribute these holdings either directly to a nonprofit or to a charitable fund. Why is this an opportunity for you? First, you don't need to pay tax on the appreciation of the stock. If you pur- chased stock for $20/share and now you own it for $50/share, you can give the stock away and avoid paying tax on the $30 in appreciation. Good news even if you don't itemize your deductions. Second, you receive a charitable deduction for the fair market value of the stock, which is $50/share in this example. So why is this important if you aren't itemizing your deductions any- way? Let's assume you give $2,500 per year to different charities, but you are still under the new standard deduction. Let's also say you have $10,000 in stock with an original cost of $3,000. If you contribute the entire $10,000 in stock in one calendar year to a charitable fund you will almost certainly be able to itemize and realize a benefit from your contribution while avoiding tax on the $7,000 in appreciation. In addition, you control the charitable fund yourself and continue to donate $2,500 per year to the charities of your choosing – you do not need to give the $10,000 directly to the charity in one calendar year. Aer four years, you will have given away the same $10,000 to charity, but you'll have saved some potentially significant tax dollars as well. Win, win!! Are you over 70½? Did you know if you are aged 70½ or more, you can contribute money to charity directly from your IRA? is qualifies as a tax-free distribu- tion, which is the equivalent to a full charitable deduction. In addition, the charitable contribution counts toward your pesky annual Required Minimum Distribution. I am frequently asked by clients whether it makes financial sense to contribute to charity. My answer was always and will continue to be that you should contribute because you care about the cause or the organization you are supporting, but let's work together to make sure we maximize your tax benefit as well. I believe in our philan- thropic nature and our desire to make the world a better place, so I'm hopeful charities will continue to see the level of support they deserve. If you are able to implement the above strategies, you just might find your charitable deduction again as well! BY MICHAEL P. MCDONOUGH Special to the Worcester Business Journal BY SUSAN SHALHOUB Special to the Worcester Business Journal A sking for advice at work isn't always easy. For leaders and managers, it's even more difficult; they don't want to appear less knowledgeable about their job or industry, aer all. However, there are pluses to asking for insight when you're in a leadership role. "e best advice might be from someone who's on the ground, who's more hungry and less withdrawn from the actual day-to-day problems you're facing," said billionaire Marc Andreessen, founder of venture capital firm Andreessen Horowitz. Here are some things to keep in mind when looking for the right answers. Avoid saying, "Can I pick your brain?" It's better to ask open-ended questions to get more comprehensive insight into how the other person is thinking, says Forbes. com's Jill Griffin. ose questions can include, "Explain what you mean by … What would it look like if … Are there conditions under which … What is most important about …?" All sound less- intrusive than having your brain picked and will get the advisee to offer up more information. Realize seeking employees' advice builds morale. It shows you trust them and their decision-making skills. "Even if you don't follow your employees' advice or take their suggestions verbatim, however, the very act of soliciting their feedback will give you more information and ideas and will make them feel involved," said Dave Levinsky at FastCompany.com. Don't worry. We can tell ourselves a million stories of why we shouldn't ask for advice: "ey're busy. It will make me seem like an amateur," etc. But according to an Inc.com article by Kate Rockwood, we as humans are wired to help. "A study from researchers at Cornell and Stanford found that people tend to underestimate – by as much as 50 percent – how willing others are to help when asked." W Michael P. McDonough is a partner at Sutton tax firm McDonough, McDonough & Corsini LLP. Reach him at mike@mmcllp.com. W

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