Benoist Wealth Strategies,Inc.Blaise Benoist, AIF®Managing Partner, BWSBranch Manager, RJFS390 N. Orange Ave. Ste. 2300Orlando, FL 32801407-900-2185blaise.benoist@benoistws.comwww.benoistws.com

4th Quarter 2019Ten Year-End Tax Tips for 2019

Key Estate Planning Documents

What are continuing care retirementcommunities?

Do independent living communities differfrom CCRCs?

Financial Insight QuarterlyYour Source for Financial Well-BeingFederal Income Tax: How Did We Get Here?

See disclaimer on final page

April 16, 2019 was animportant day for many ofus. But do you knowwhy? It was Tax FreedomDay — the day when theaverage Americantheoretically earnedenough to pay his or hertax obligations for the

year. According to the Tax Foundation,Americans will pay $3.4 trillion in federal taxesin 2019, more than they spend on food,clothing, and housing combined.* But it wasn'talways this way. In fact, income taxes are afairly new development in the overall history ofAmerica. So how did we get to this point?

In the beginning...The United States was founded, in part, on thepremise that colonists didn't want to pay taxeswithout representation, which led to the famoustossing of tea into the Boston Harbor and theAmerican Revolution. However, not long afterthe colonies gained their freedom fromEngland, Congress passed the Stamp Act of1797, which essentially was our nation's firstestate tax. Otherwise, from the early 1790s to1802, the U.S. government was supported bytaxes on such items as spirits (alcohol, not theghostly kind), sugar, tobacco, and corporatebonds.

Wars played a big part in the history of taxationin this country. To fund the War of 1812,Congress taxed sales of gold, silverware,jewelry, and watches. In 1817, tariffs onimported goods provided the main source ofrevenue to run the government.

With the onset of the Civil War, Congressenacted the nation's first income tax law, theRevenue Act of 1861, which included a flat taxof 3% on annual incomes exceeding $800 tohelp pay for the costs of the war. That tax lawwas repealed and replaced by the Revenue Actof 1862, which established the Office of theCommissioner of Internal Revenue (forerunnerto the Internal Revenue Service), levied excisetaxes on most goods and services, andreplaced the flat tax with a progressive tax.

The 16th AmendmentHowever, it was not until 1913 with the adoptionof the 16th Amendment to the Constitution, thatthe income tax became a permanent fixture inthe American tax system. Congress now hadthe authority to tax income of both individualsand corporations. It didn't take the IRS long tostart inundating us with forms, beginning in1914 with the introduction of the first income taxform, the dreaded Form 1040. Enactment of theRevenue Act of 1916 introduced tax rates andincome scales.

Tax ratesHere's a sobering fact: In 1913, the top federalincome tax bracket was 7% on all income over$500,000, and the lowest tax bracket was 1%.During the Great Depression, Congress raisedthe highest tax bracket to 63%. Wars can beexpensive, as evidenced by the jump in thehighest tax rate to 94% during World War II. In2018, the highest income tax rate was loweredto 37%.

Trying to get it rightOver the years, there have been frequentattempts to reform the tax law in some manner.We've seen the adoption of the alternativeminimum tax, Social Security tax, taxes oncigarettes and alcohol, gasoline taxes, aviationtaxes, property taxes, telecommunication taxes,not to mention state and local taxes. To quoteWill Rogers, "The difference between death andtaxes is death doesn't get worse every timeCongress meets."

Tax laws are always changing and will likelyremain a political hot potato. Only time will tellwhat changes are ahead, but there is no doubtthat through taxation, what the governmentgiveth, it inevitably taketh back again.

*Tax Freedom Day 2019 was April 16, as calculatedby the Tax Foundation, taxfoundation.org.

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Ten Year-End Tax Tips for 2019Here are 10 things to consider as you weighpotential tax moves between now and the endof the year.

1. Set aside time to planEffective planning requires that you have agood understanding of your current taxsituation, as well as a reasonable estimate ofhow your circumstances might change nextyear. There's a real opportunity for tax savingsif you'll be paying taxes at a lower rate in oneyear than in the other. However, the window formost tax-saving moves closes on December31, so don't procrastinate.

2. Defer income to next yearConsider opportunities to defer income to 2020,particularly if you think you may be in a lowertax bracket then. For example, you may be ableto defer a year-end bonus or delay thecollection of business debts, rents, andpayments for services. Doing so may enableyou to postpone payment of tax on the incomeuntil next year.

3. Accelerate deductionsYou might also look for opportunities toaccelerate deductions into the current tax year.If you itemize deductions, making payments fordeductible expenses such as medicalexpenses, qualifying interest, and state taxesbefore the end of the year (instead of payingthem in early 2020) could make a difference onyour 2019 return.

4. Factor in the AMTIf you're subject to the alternative minimum tax(AMT), traditional year-end maneuvers such asdeferring income and accelerating deductionscan have a negative effect. Essentially aseparate federal income tax system with itsown rates and rules, the AMT effectivelydisallows a number of itemized deductions. Forexample, if you're subject to the AMT in 2019,prepaying 2020 state and local taxes probablywon't help your 2019 tax situation, but couldhurt your 2020 bottom line. Taking the time todetermine whether you may be subject to theAMT before you make any year-end movescould help you avoid a costly mistake.

5. Bump up withholding to cover a taxshortfallIf it looks as though you're going to owe federalincome tax for the year, especially if you thinkyou may be subject to an estimated tax penalty,consider asking your employer (on Form W-4)to increase your withholding for the remainderof the year to cover the shortfall. The biggestadvantage in doing so is that withholding is

considered as having been paid evenlythroughout the year instead of when the dollarsare actually taken from your paycheck. Thisstrategy can also be used to make up for low ormissing quarterly estimated tax payments. Withall the recent tax changes, it may be especiallyimportant to review your withholding in 2019.

6. Maximize retirement savingsDeductible contributions to a traditional IRA andpre-tax contributions to an employer-sponsoredretirement plan such as a 401(k) can reduceyour 2019 taxable income. If you haven'talready contributed up to the maximum amountallowed, consider doing so by year-end.

7. Take any required distributionsOnce you reach age 70½, you generally muststart taking required minimum distributions(RMDs) from traditional IRAs andemployer-sponsored retirement plans (anexception may apply if you're still working forthe employer sponsoring the plan). Take anydistributions by the date required — the end ofthe year for most individuals. The penalty forfailing to do so is substantial: 50% of anyamount that you failed to distribute as required.

8. Weigh year-end investment movesYou shouldn't let tax considerations drive yourinvestment decisions. However, it's worthconsidering the tax implications of any year-endinvestment moves that you make. For example,if you have realized net capital gains fromselling securities at a profit, you might avoidbeing taxed on some or all of those gains byselling losing positions. Any losses over andabove the amount of your gains can be used tooffset up to $3,000 of ordinary income ($1,500if your filing status is married filing separately)or carried forward to reduce your taxes in futureyears.

9. Beware the net investment incometaxDon't forget to account for the 3.8% netinvestment income tax. This additional tax mayapply to some or all of your net investmentincome if your modified adjusted gross income(AGI) exceeds $200,000 ($250,000 if marriedfiling jointly, $125,000 if married filingseparately, $200,000 if head of household).

10. Get help if you need itThere's a lot to think about when it comes to taxplanning. That's why it often makes sense totalk to a tax professional who is able toevaluate your situation and help you determineif any year-end moves make sense for you.

Timing of itemizeddeductions and theincreased standarddeduction

Recent tax law changessubstantially increased thestandard deduction amountsand made significant changesto itemized deductions. It maynow be especially useful tobunch itemized deductions incertain years; for example,when they would exceed thestandard deduction.

IRA and retirement plancontributions

For 2019, you can contributeup to $19,000 to a 401(k) plan($25,000 if you're age 50 orolder) and up to $6,000 totraditional and Roth IRAscombined ($7,000 if you're age50 or older). The window tomake 2019 contributions to anemployer plan generally closesat the end of the year, whileyou typically have until the duedate of your federal income taxreturn (not includingextensions) to make 2019 IRAcontributions.

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Key Estate Planning DocumentsEstate planning is the process of managing andpreserving your assets while you are alive, andconserving and controlling their distributionafter your death. There are four key estateplanning documents almost everyone shouldhave regardless of age, health, or wealth. Theyare: a durable power of attorney, advancemedical directives, a will, and a letter ofinstruction.

Durable power of attorneyIncapacity can happen to anyone at any time,but your risk generally increases as you growolder. You have to consider what would happenif, for example, you were unable to makedecisions or conduct your own affairs. Failing toplan may mean a court would have to appoint aguardian, and the guardian might makedecisions that would be different from what youwould have wanted.

A durable power of attorney (DPOA) enablesyou to authorize a family member or othertrusted individual to make financial decisions ortransact business on your behalf, even if youbecome incapacitated. The designatedindividual can do things like pay everydayexpenses, collect benefits, watch over yourinvestments, and file taxes.

There are two types of DPOAs: (1) animmediate DPOA, which is effective at once(this may be appropriate, for example, if youface a serious operation or illness), and (2) aspringing DPOA, which is not effective unlessyou become incapacitated.

Advance medical directivesAdvance medical directives let others knowwhat forms of medical treatment you prefer andenable you to designate someone to makemedical decisions for you in the event you can'texpress your own wishes. If you don't have anadvance medical directive, health-careproviders could use unwanted treatments andprocedures to prolong your life at any cost.

There are three types of advance medicaldirectives. Each state allows only a certain type(or types). You may find that one, two, or allthree types are necessary to carry out all ofyour wishes for medical treatment.

• A living will is a document that specifies thetypes of medical treatment you would want,or not want, under particular circumstances.In most states, a living will takes effect onlyunder certain circumstances, such as aterminal illness or injury. Generally, one canbe used only to decline medical treatment

that "serves only to postpone the moment ofdeath."

• A health-care proxy lets one or more familymembers or other trusted individuals makemedical decisions for you. You decide howmuch power your representative will or won'thave.

• A do-not-resuscitate (DNR) order is a legalform, signed by both you and your doctor,that gives health-care professionalspermission to carry out your wishes.

WillA will is quite often the cornerstone of an estateplan. It is a formal, legal document that directshow your property is to be distributed when youdie. If you don't leave a will, disbursements willbe made according to state law, which mightnot be what you would want.

There are a couple of other important purposesfor a will. It allows you to name an executor tocarry out your wishes, as specified in the will,and a guardian for your minor children.

The will should be written, signed by you, andwitnessed.

Most wills have to be probated. The will is filedwith the probate court. The executor collectsassets, pays debts and taxes owed, anddistributes any remaining property to the rightfulheirs. The rules vary from state to state, but insome states smaller estates are exempt fromprobate or qualify for an expedited process.

Letter of instructionA letter of instruction is an informal, nonlegaldocument that generally accompanies your willand is used to express your personal thoughtsand directions regarding what is in the will (orabout other things, such as your burial wishesor where to locate other documents). This canbe the most helpful document you leave foryour family members and your executor.

Unlike your will, a letter of instruction remainsprivate. Therefore, it is an opportunity to say thethings you would rather not make public.

A letter of instruction is not a substitute for awill. Any directions you include in the letter areonly suggestions and are not binding. Thepeople to whom you address the letter mayfollow or disregard any instructions.

Take steps nowLife is unpredictable. So take steps now, whileyou can, to have the proper documents in placeto ensure that your wishes are carried out.

There are four key estateplanning documents almosteveryone should haveregardless of age, health, orwealth: a durable power ofattorney, advance medicaldirectives, a will, and a letterof instruction.

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Benoist WealthStrategies, Inc.Blaise Benoist, AIF®Managing Partner, BWSBranch Manager, RJFS390 N. Orange Ave. Ste. 2300Orlando, FL 32801407-900-2185blaise.benoist@benoistws.comwww.benoistws.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019

This information, developed by anindependent third party, has been obtainedfrom sources considered to be reliable, butRaymond James Financial Services, Inc.does not guarantee that the foregoingmaterial is accurate or complete. Thisinformation is not a complete summary orstatement of all available data necessary formaking an investment decision and does notconstitute a recommendation. Theinformation contained in this report does notpurport to be a complete description of thesecurities, markets, or developments referredto in this material. This information is notintended as a solicitation or an offer to buy orsell any security referred to herein.Investments mentioned may not be suitablefor all investors. The material is general innature. Past performance may not beindicative of future results. Raymond JamesFinancial Services, Inc. does not provideadvice on tax, legal or mortgage issues.These matters should be discussed with theappropriate professional.

Benoist Wealth Strategies, Inc. is not aregistered broker/dealer and is independentof Raymond James Financial Services, Inc.,member FINRA/SIPC. Securities offeredthrough Raymond James Financial Services,Inc., member FINRA/SIPC. Investmentadvisory services offered through RaymondJames Financial Services Advisors, Inc.

Do independent living communities differ from CCRCs?Independent livingcommunities, also known asrental retirement communities,offer housing options for activeseniors and retirees who

require little or no assistance with dailyactivities. Most independent living residentsdesire an environment where they don't have tobe concerned about safety, maintenance, andhomeownership responsibilities.

One of the major offshoots of the burgeoningnumber of baby boomers retiring every day isthe growing retirement living industry. More andmore communities dedicated to senior living areopening each year. Two popular options arecontinuing care retirement communities(CCRCs) and independent living communities.While there are similarities between the two,there are important differences as well.

Both CCRCs and independent livingcommunities may offer amenities such as aclubhouse, lounge, dining rooms, fitnesscenters, swimming pools, housekeepingservices, and transportation. CCRCs usuallyoffer a higher level of amenities and servicesthan independent living communities.

The main difference between CCRCs and

independent living communities is the extent ofhealth-related, or continuing care, servicesoffered by CCRCs, which include assisted livingservices, memory care, and long-term care.Independent living communities typically do notoffer continuing care services. Instead, theresident may arrange for such services throughan outside agency. Generally, independentliving communities do not offer assisted livingservices or long-term care.

Another difference between CCRCs andindependent living communities relates to thecosts. Most CCRCs require a substantial entryfee plus a monthly fee. Typically, independentliving communities charge a monthly fee,similar to rent. Independent living fees areusually not covered by any type of insurance,including Medicare and long-term careinsurance. However, health-related servicesand care that a resident receives (which are notoffered by the independent resident community)may be covered by insurance or Medicare.

Determining which type of community is thebest choice depends on a number of factorsincluding the services needed or desired andthe costs associated with each type ofresidential community.

What are continuing care retirement communities?Continuing care retirementcommunities (CCRCs) areliving arrangements thatcombine independent living,assisted living, and nursing

home care on a single campus. CCRCs offerresidents a continuum of care throughout theirlives.

Typically, you enter a CCRC as a resident of anindependent housing unit, which may be acondominium, apartment, or single-familyhome. When you need more care or are unableto live independently, you can move to theassisted living facility on campus. Should youneed the next level of care, you can move intothe on-site nursing home.

While specific services and benefits may differ,communities generally offer dining facilities,transportation, lawn care, housekeeping, socialactivities, laundry, emergency call monitoring,and security. As needs arise, additionalservices may include preparation of meals,health services such as medical care, andpersonal care such as assistance with toileting,bathing, and personal hygiene.

The fee arrangements for CCRCs vary andgenerally include both a monthly fee and an

entrance fee. These fees can be quitesubstantial depending on the location of thecommunity, the services offered and chosen,and the living arrangements desired. The entryfee may be fully or partially refundable, andmonthly fees may increase over time. Medicareand/or health insurance may pay for some ofthe services provided.

There are three basic types of residentialarrangements for CCRCs:

• Life care or extended contract. This optionoffers unlimited assisted living, medicaltreatment, and skilled nursing care. Thisalternative is often the priciest because thereare typically no additional fees or charges.

• Modified contract. This contract is similar tothe life care option, except that only certaindefined services are included for apredetermined price and/or for a specifiedlength of time. Extra charges will apply if youneed additional services or are able to extendthe contract's time frame.

• Fee-for-service contract. While the initialenrollment fee may be lower, assisted-livingand skilled-care services are paid for at theirmarket rates.

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