2019 Tax Strategies

Published March 4th, 2019 in Blog |

2019 tax stratgies

2019 Tax Strategies: Increase Tax Savings

The 2018 tax preparation season is upon us, meaning that it is also time to review the new tax laws and start developing tax strategies for taking advantage of them in 2019.  Below are eight ideas that can be implemented immediately to help increase tax savings next year.

Health Savings Account:

In many cases, a Health Savings Account, or HSA, can be a wonderful tax-saving option.  Because it is funded with pre-tax dollars, one can take a deduction on the amount being deposited.  If used for qualifying medical expenses, the funds are then distributed free of federal or state taxes.  In other words, the money goes into the account as a tax deduction, it grows tax-deferred while in the account, and is then withdrawn tax-free if used for qualified medical expenses. There must be a high-deductible plan in place to take advantage of this scenario, but most group plans do offer one as an option.  Another advantage to these plans is that there is no requirement to reimburse oneself immediately, so the account can continue to grow and later be used for Medicare Part B premiums, prescription drugs, deductibles, co-pays, and even long-term care premiums.  Individuals with a family high-deductible health plan can contribute up to $7,000 in an HSA, with a $1000 catch-up contribution for those 55+ years old and over.

Roth IRA Conversions:

When using this strategy, assets from a traditional IRA are converted to a Roth IRA to accumulate tax-free funds for retirement or wealth transfer to beneficiaries.  There are no restrictions on how much can be converted or who can convert them.  Taxes are paid on the dollars that are converted, but they are paid at the lower, current rate.  It should be kept in mind that the effectiveness of this particular option may change in the future since it is not known what the tax rates will be.

The Backdoor Roth IRA Contribution:

A backdoor Roth IRA is a traditional IRA that is funded using a non-deductible contribution and then converted to a Roth IRA.  Individuals who are limited in doing annual Roth IRA contributions due to their high-income level find this to be a very useful strategy.  There is no tax on the conversion because it is made up of after-tax dollars, but one must be careful not to allow other IRA assets to be pulled into the tax calculation.  This strategy works best if an individual has no other IRA assets, and it is a good way to get funds flowing into a Roth IRA when they would not otherwise qualify.

The Mega Roth 401(k):

Employees can contribute their payroll deferrals on a Roth basis if their employer has adopted Roth amendments to their 401(k) plans, which many have.  This means that an employee’s contributions – and their resulting growth – will be withdrawn tax-free.  Since many plans now allow employees to contribute over the payroll deferral limits, the tax savings can be significant.  Plus, employees can contribute up to $56,000 between payroll deferrals and after-tax contributions, with an increase to $62,000 if they are age 50 or older.  It should be noted that the after-tax contributions should be converted to a Roth also, so that the growth will also come out tax-free.  This can be done every year, either by an in-service rollover to a Roth IRA (if the plan allows) or through in-plan conversions.

The QCD, or Qualified Charitable Distribution:

If an individual is required to take minimum distributions from an IRA, they can avoid paying tax on distributions by making charitable donations directly from the account.  The donations will count as part of the distribution requirement and are essentially tax-free.  Due to the new tax laws, many individuals will not see a benefit from deducting their charitable contributions on Schedule A.  Rather, with a QCD, the same contributions that an individual would normally make can be done using funds that they would have to withdraw anyway.  A maximum of $100,000 can be distributed under the QCD.

The Donor Advised Fund:

An individual can “stack” several years’ worth of donations into one by contributing to a Donor Advised Fund.  It will then be possible to potentially deduct the excess over the standard deduction for that year.  Contributions and their earnings can then be distributed out over a specific period decided by the individual and their charitable needs.

The Solo Roth 401(k):

Small business owners with no other employees can contribute up to $25,000 per year into a solo Roth 401(k) if age 50 or older, or $19,000 per year if under age 50.  Solo IRAs are easy to set up and do not block an individual from doing a traditional IRA or Roth IRA contribution if they are otherwise qualified.

Qualified Business Income Deduction:

An individual who is self-employed, an S corporation, or a LLC can deduct up to 20 percent of their qualified business income under the new tax laws.  Income can be deferred, or expenses accelerated, if an individual is subject to the income limitation on this deduction.  Income sources that do not qualify for the deduction can be separated into a different LLC or S corporation so the business lines that do qualify for the deduction will get it.

Conclusion: The new tax laws have created many changes and many opportunities.  The concepts above provide an excellent starting point for an individual to start taking advantage of the new laws.  A qualified, holistic professional can help develop a customized plan for an individual’s specific circumstances. Look for a holistic financial advisor near you who can help you with your tax preparation and file with confidence!

Interested in building out a tax practice? Call us at 888-240-1923 to learn more about attending our tax training events. These events will teach you how to integrate tax planning and preparation services into your business and the strategies necessary to attract and convert tax clients into planing clients.


Published November 4th, 2016 in Press Releases |

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For advisors who want to thrive post-DOL

December 6-8 in Las Vegas, Nevada

WHAT:     This Holistic Advisor Academy is a 1.5-day educational event designed for advisors who want to thrive post-DOL. Attendees will learn how to “DOL-Proof” their sales and planning processes, revenue and businesses as a whole.

With the greatest legislative change in the financial industry in more than 40 years, get to the core of what the DOL legislation means to your business with specific insight on the DOL rule, including an overview of what’s changing and how you’ll be impacted, points still up for determination, compliance considerations and highlights of recommended action steps. From proven, turnkey processes to tangible takeaways, get the tools you need—attending this event is in your best interest.

WHERE:     Holistic Advisor Academy—DOL Edition will be held in at The Mirage in Las Vegas, Nevada.

The Mirage

3400 S Las Vegas Blvd.

Las Vegas, NV 89109

WHEN:     December 6 – 7 p.m. (PT)

December 7 – 8 a.m. to 5 p.m. (PT)

December 8 – 8 a.m. to Noon (PT)

WHO:     Hosted by Clarity 2 Prosperity and Prosperity Capital Advisors, Holistic Advisor Academy—DOL Edition is led by advisors, coaches and business leaders, including founder Jason L Smith, a nationally-acclaimed speaker, financial planner, author, coach and DOL subject matter expert. As founder of one of the first IMOs to file for Financial Institution Exemption, Jason has had direct personal conversations with the Department of Labor and has worked with them on multiple occasions to gain an in depth understanding of the developing regulation. Jason has been featured in a wide variety of industry publications as well as on numerous webinars, podcasts, and training platforms breaking down and educating advisors on what the new rule may potentially mean to them, as well as teaching proven turnkey processes they can implement to proactively adapt their practices.

WHY:     Take the guesswork out of “DOL-Proofing” your overall practice with real, practical knowledge that includes topics such as: How to meet the best interest standards through a “DOL-Proof” holistic planning process; Implement a “DOL-Proof” sales process, without the need for expensive software; turn “documentation requirements” into a planning process that creates value for prospects; an exclusive, guided self-assessment on the DOL-readiness of your financial planning process to determine what areas need adjustment; the screening process used to select products and portfolios to meet the best interest standards for your clients; how to set a planning fee as well as protect the fees you’re already charging; how to introduce new lines of business to your firm that are not impacted by DOL regulation; build a business plan you can execute today for business post-DOL; step-by-step analysis of business expenses as you move into a fee-based industry and so much more.

DETAILS:     Tuition for the 1.5-day event is $499 and includes all meals during the event and a two-night stay at The Mirage in Las Vegas, Nevada. For more information about Holistic Advisor Academy and to register for this event, please visit C2PEvents.com.

For an advanced look at the topics covered at the event, visit C2PEvents.com and download the white paper “5 Critical Areas Impacted by the DOL Rule, and What You Can Do Now.”

About Clarity 2 Prosperity and Prosperity Capital Advisors

Clarity 2 Prosperity and Prosperity Capital Advisors are affiliated financial planning organizations with a mission to shift advisor focus from selling products to becoming holistic service providers, effectively serving the comprehensive needs of American families. For more information about Clarity 2 Prosperity visit Clarity2Prosperity.com or call (888) 240-1923 and for Prosperity Capital Advisors visit ProsperityCapitalAdvisors.com or call (888) 240-0064.

Prosperity Capital Advisors is an SEC registered investment adviser with its principal place of business in the State of Ohio. For more detailed information about Prosperity’s products and services, please visit www.adviserinfo.sec.gov or contact the firm at www.ProsperityCapitalAdvisors.com. Please read this disclosure statement carefully. Registration with the SEC does not imply any level of skill or expertise. PCA does not provide tax or legal advice.


Life Health Pro: “Set yourself apart”

Published October 28th, 2016 in PR Placements |

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At the beginning of my career, a big mistake I made for quite a long time was being just like everybody else. There was nothing unique I did as a broker. Differentiating yourself can be the key to standing out and creating a strong and loyal client base. Read Full Article