2016 Tax Planning & UpdatesMark Sipos, LFG Tax Services Accountant

There are some proven tax planning tips that can be applied each and every year. They are highly effective and proven to minimize your tax bill. Here is a brief highlight of the tax planning maneuvers you should be considering for 2016:

1) Defer Income: Income is taxed in the year it is received. Consider deferring year-end bonuses from employers to 2017 if that income will place you in a higher tax bracket in 2016. If you are self-employed, you may consider delaying billings until late December so that the payments are not received until 2017. Also consider accelerating income into 2016 if you will be in a lower tax bracket in the current tax year.

A Quar ter ly Publication Vol . 8 Issue 4 / O c tob er 2016the WealthWATCHSM the WealthWATCHSM 1

INSIDE THIS ISSUE

2016 Tax Planning page 1 & Updates

Letter From The President page 2

2016 Client Appreciation page 2

Economic Commentary page 3

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Mark Sipos2) Charitable Deductions: You may wish to consider donating appreciated property (stocks or property) in lieu of cash. You achieve the double tax benefit of deducting the contributed asset at Fair Market Value and avoiding paying the capital gains tax on the built-up appreciation.

3) HSA: Consider setting up and contributing to a Health Savings Account. You may make a tax deductible contribution to a Self-Only HSA of $3,350 or a family HSA of $6,750 (plus an additional $1,000 if age 55+). You must have a minimum annual deductible of $1,300 in an individual plan or $2,600 as a family plan.

4) Loss Harvesting: Offset capital gains on sales of stocks or mutual funds by selling investments that you are holding at an unrealized loss. Gains are offset dollar-for-dollar against losses and you may deduct $3,000 over and above any gains.

5) Maximize your retirement accounts: • You may put as much as $18,000 into your 401K - $24,000 if you are over age 50, and often your employer matches at least a portion. If you cannot afford the max amount, try to at least contribute enough that will be matched by your employer.

• Consider contributing to an IRA for 2016. An eligible taxpayer may contribute up to $5,500, plus an additional $1,000 if age 50 or older.

• Self-Employed Keogh plans must be established by 12/31/2016 but contributions are not due until the filing deadline including extensions. The amount that you may contribute depends on the plan you choose.6) Check your Flexible Spending Accounts: Take a fresh look into your planned medical expenses and update your FSA to maximize its benefit.

7) “Bunch” your itemized deductions: Each taxpayer has a choice of taking the Standard Deduction or the Itemized Deduction expense, whichever is higher. The Itemized Deduction expense includes items such as out-of-pocket medical, mortgage interest, real estate taxes, and charitable contributions just to name a few. You may not have enough expenses in order to take advantage of itemizing deductions each year. You may gain an advantage by “bunching” these expenses every other year which may allow you to exceed the Standard Deduction threshold. “Bunching” is the technique of accelerating your Itemized Deduction expenses into a tax year, in effect doubling those expenses. For example, you may prepay a known medical expense, pay your real estate taxes in December rather than February of the next year, pay a planned charitable donation early, or pay your state and local estimated taxes in December instead of January.continued on page 3

Securities offered through Triad Advisors, member FINRA/SIPC. Advisory services offered through Lineweaver Wealth Advisors, LLC. Lineweaver Wealth Advisors is not affiliated with Triad Advisors. This is for informational purposes only and should not be construed as tax or legal advice. Consult your tax or legal advisor in regard to your specific situation.

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by Jim Lineweaver, CFP®, President and FounderLE T TER FROM THE PRESIDENT

The Department of Labor has new rules which go into effect in April, 2017. The Fiduciary Rule requires retirement advisors to adhere to a fiduciary standard, putting the best interests of their clients first rather than their own. The new rule expands the types of retirement investment advice covered by fiduciary rules to include IRAs for the first time

Previously brokers and advisors were held to a less rigid standard, and could recommend products that put their own profits ahead of the best interests of their clients. The revised Fiduciary Rule will require retirement brokers to be more accountable for the advice they provide to their clients, making sustainable retirement income more likely for many retirees.

The important point is that as a fiduciary, we are required to act in the best interest of our clients. This means that any advice and recommendations must be driven by what is best for you and cannot be influenced by any other considerations. The fiduciary standard also requires advisers to maintain the expertise to both thoroughly understand clients’ financial situations as well as the variety of options available to help them meet their financial goals.

One of the more beneficial impacts of the new rules will be consolidation in the industry and less qualified advisors will fall by the wayside. All the better. The investing public will only benefit from an increased standard of care and the protections afforded under the Department of Labor rules. I welcome the change.

I would also warn that the amount of paperwork needed to open accounts and make changes in the future will obviously be increasing based on this new regulation change. We will continue to keep you posted as the procedures develop and become implemented over the next 12-18 months.

2016 CLIENT APPRECIATION

A big thank you to everyone who attended our annual Client Appreciation event! We hope you enjoyed the food, games, and company as much as we did. This year’s addition of a photo booth proved to be a big hit with our clients as well as our staff – just take a look at some of the pictures we captured below!

We’d also like to thank everyone who made donations towards our 2016-2017 Harvest for Hunger campaign. Together we raised $1,330 in cash and over 35 boxes stuffed full of canned goods! We can’t thank you enough for all your support. LFG will continue collecting canned food items throughout the year, and your donations are always welcome and appreciated.

Look for Jim’s article “New Rule Changes May Avoid 60 Day IRA Rollover Penalty” in the September-October issue of Boomer and Beyond Magazine, or click here for the online version. If you have any questions about the new IRA rules discussed in the article, please give us a call.

For many, the end-of-summer months of July, August and September bring warmer weather, vacation and time with family. At the end of Q3, investors were treated to some calm as light trading activity was met with modest gains across stocks and the Fed decided not to change rates on September 22nd. Despite volatility through the first half of the year, Q3 brought much needed positive economic data, job growth and increases to investor sentiment.

Some key highlights over the quarter:

• Investors were encouraged by a solid upturn in US housing construction, driven in part by continued improvement in the job market. Late in the month, the US Commerce Department announced that new home sales had surged 12.4% in July and reached a nine-year high.

• International stocks rose during the quarter, as investors shifted towards equities given the low interest rate environment. Global financials, though, rallied during the month as uncertainty around Brexit eased and bank share prices began to rebound from prior lows.

• Volatility in oil prices and supply glut concerns caused swings in commodities. Although some market participants anticipate a return to higher prices, they expect oil prices to settle into a new long-term average in the $40 to $50 per barrel range.

• Emerging markets stocks rose for the third straight month in August as the prevalence of low or negative government debt yields across the developed world buoyed demand for higher-yielding assets.

• Fixed Income was mostly flat for the quarter, with the exception of High Yield bonds, which continued to advance +4% over the quarter (over +13.5% year-to-date). Increases to Treasury yields were offset by global demand for higher yielding assets.

Markets moved quickly past June’s Brexit fears but continued to be laser focused in on the Fed’s positioning on interest rates, the election season and global growth. Interestingly, when markets start strong (over 6%+) with 100 days left in the year, historically, markets continued to trend higher 90% of the time (36 out of 40 periods). With uncertainty brewing with the political campaign season ahead, we believe that maintaining a diversified portfolio and following a disciplined rebalancing plan will help enable investors to weather volatility in such times.

Tune in to WKYC Channel 3 at 11:30am every other Sunday to see a member of our team on the Golden Opportunities show with Laurie Steiner, where we discuss current financial topics in an easy to understand format.

Upcoming shows and topics:

GOLDEN OPPORTUNITIES SHOW

ECONOMIC COMMENTARY

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This year’s summer Olympics in Rio gave way to a brand new form of fitness. Halo Sport, a set of headphones designed to stimulate the brain’s motor cortex, was

Sunday, October 23, 2016When Will the Next Shoe Drop

Sunday, November 6, 2016Tax Landscape

Sunday, November 20, 2016The Power of Power of Attorney

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

8) Use your RMD as a Charitable Deduction tool: Taxpayers 70 and older are allowed to use their Required Minimum Distributions (RMDs) from their IRAs as charitable contributions and not count the RMD as taxable income. The RMD must be directly transferred to the qualified charitable organization.

9) Gifting: Taxpayers, and their spouses, are allowed to gift $14,000 each to any number of individuals without having to pay gift tax on the money. One tax planning tip would be to consider gifting appreciated stock worth $14,000 to the individual(s) in lieu of cash if that individual is in a lower tax bracket. The taxpayer gifting the appreciated stock does not owe capital gains tax on the transaction, and the gifted stock transfers to the individual to compute their gain at the potential lower rates.

10) Medicare Surtax: Certain high-income taxpayers are subject to the Medicare Surtax of an additional 3.8% on their net investment income. The taxpayers may want to consider investment strategies such as tax-free municipal bonds that are not subject to the Medicare Surtax.

LFG will be hosting a complimentary educational program on these tax tips and more on Tuesday, November 15 at 1:00pm and Thursday, November 17 at 6:00pm. Give us a call to reserve your seat!

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HEALTHWATCH New Brain Training Technique Used at the Olympics

used by several of the athletes who competed in this year’s games. The company behind this invention, Halo Neuroscience, compare it to the way good nutrition supports a healthy body and strong muscles. Click the link below to see the full article, as well as a video of the Olympic athletes who used it and their reactions.

www.labroots.com/trending/neuroscience/3905/brain-training-olympics

http://lineweaver.net/virteom/uploaded_media/Modules/glmod_Modules_Meet-The-Team/PAMELA.JPG-1449603426.jpg

9035 Sweet Valley Drive Valley View, Ohio 44125 1-888-313-4009

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Amanda is the newest member of the Processing Team. She assists with the processing of new business and helps ensure a smooth transition of transfers and also the establishment of new accounts. Amanda works closely with the other members of our processing team by assisting our clients with general service issues such as beneficiary and address changes, required minimum distributions and withdrawals.

The term “O.K.” is credited to Martin Van Buren who was raised in Kinderhook, New York. After he went into politics, Van Buren became known as “Old Kinderhook.” Soon people were using the term O.K. referring to Van Buren and the word “okay” was derived.

Amanda graduated from the University of Toledo with a Bachelor’s Degree in English Literature in 2007. She is a Cleveland native who recently moved back from Toledo and is loving everything Cleveland has to offer. Amanda is an avid reader and lover of the arts. In her spare time, she enjoys exploring her new city with family and friends, volunteering at Ronald McDonald House Charities and learning the art of BBQ!

If you would like to receive our newsletter through email, please email Annika at Annika@lineweaver.net

EMPLOYEE SPOTLIGHTAmanda Becker, Processing and Client Services

TRIVIA