Medicare Open Enrollment for 2021 Begins October 15

The annual Medicare Open Enrollment Period is the time during which Medicare beneficiaries can make new choices and pick plans that work best for them. Each year, Medicare plan costs and coverage typically change. In addition, your health-care needs may have changed over the past year. The Open Enrollment Period — which begins on October 15 and runs through December 7 — is your opportunity to switch Medicare health and prescription drug plans to better suit your needs.

During this period, you can: Continue reading “Medicare Open Enrollment for 2021 Begins October 15”

What History Tells us About US Presidential Elections and the Market

Our colleagues at Dimensional Funds shared these stats with us, so we thought it a prudent time to share the information here,  on our weekly blog.

  • It’s natural for investors to look for a connection between who wins the White House and which way stocks will go. But as nearly a century of returns shows, stocks have trended upward across administrations from both parties.
  • Shareholders are investing in companies, not a political party. And companies focus on servicing their customers and growing their businesses, regardless of who in the White House.
  • US presidents may have an impact on market returns, but so do hundreds, if not thousands, of other factors – the actions of foreign leaders, a global pandemic, interest rate changes, rising and falling oil prices, and technological advances, just to name a few.
  • Stocks have rewarded disciplined investors for decades, through Democratic and Republican presidencies. It’s an important less on the benefits of a long-term investment approach. 

Continue reading “What History Tells us About US Presidential Elections and the Market”

Five Investment Tasks to Tackle by Year-End

Market turbulence in 2020 may have wreaked havoc on your investment goals for the year. It probably also highlighted the importance of periodically reviewing your investment portfolio to determine whether adjustments are needed to keep it on track. Now is a good time to take on these five year-end investment tasks.

1. Evaluate Your Investment Portfolio

Continue reading “Five Investment Tasks to Tackle by Year-End”

Key Numbers Projected for 2021

Key Numbers Projected for 2021

Even though the official numbers have not yet been published by the IRS, we wanted to send over the projected key tax figures for 2021. When the official numbers are released, we’ll share an update with an associated Email Alert.

Standard deduction
2020 Projected for 2021
Married filing jointly $24,800 $25,100
Head of household $18,650 $18,800
Single $12,400 $12,550
Married filing separately $12,400 $12,550
Standard deduction for dependent Greater of $1,100 or $350 + earned income Greater of $1,100 or $350 + earned income
Additional standard deduction for blind or aged (65 or older)
Single/Head of household $1,650 $1,700
All others $1,300 $1,350
Taxable income threshold for top 37% income tax bracket
2020 Projected for 2021
Married filing jointly $622,050 $628,300
Head of household $518,400 $523,600
Single $518,400 $523,600
Married filing separately $311,025 $314,150
Long-term capital gain 20% threshold (based on taxable income)
2020 Projected for 2021
Married filing jointly $496,600 $501,600
Head of household $469,050 $473,750
Single $441,450 $445,850
Married filing separately $248,300 $250,800
Alternative minimum tax (AMT)
2020 Projected for 2021
Maximum AMT exemption amount
Married filing jointly $113,400 $114,600
Single/Head of household $72,900 $73,600
Married filing separately $56,700 $57,300
Exemption phaseout threshold
Married filing jointly $1,036,800 $1,047,200
Single/Head of household $518,400 $523,600
Married filing separately $518,400 $523,600
26% on AMTI* up to amount, 28% on AMTI above amount
Married filing separately $98,950 $99,950
All others $197,900 $199,900

*Alternative minimum taxable income

Kiddie tax: Child’s unearned income
2020 Projected for 2021
Above this amount taxed using parents’ tax rates $2,200 $2,200
IRAs
2020 Projected for 2021
Contribution limits
Traditional and Roth IRAs (combined) $6,000 ($7,000 if age 50 or older) $6,000 ($7,000 if age 50 or older)
Roth IRA income phaseout range (contributions)
Single/Head of household $124,000 to $139,000 $125,000 to $140,000
Married filing jointly $196,000 to $206,000 $198,000 to $208,000
Married filing separately $0 to $10,000 $0 to $10,000
Traditional IRA income phaseout range (deductibility)
1. Covered by an employer-sponsored plan and filing as:
Single/Head of household $65,000 to $75,000 $66,000 to $76,000
Married filing jointly $104,000 to $124,000 $105,000 to $125,000
2. Not covered by plan but filing joint return with covered spouse $196,000 to $206,000 $198,000 to $208,000
3. Married filing separately and either spouse is covered by plan $0 to $10,000 $0 to $10,000
Estate planning
2020 Projected for 2021
Top gift, estate, and generation-skipping transfer (GST) tax rate 40% 40%
Annual gift tax exclusion $15,000 $15,000
Noncitizen spouse annual gift tax exclusion $157,000 $159,000
Gift tax and estate tax applicable exclusion amount $11,580,0001 + DSUEA2 $11,700,0001 + DSUEA2
GST tax exemption $11,580,000 $11,700,000

1Basic exclusion amount

2Deceased spousal unused exclusion amount

 

Continue reading “Key Numbers Projected for 2021”

A little bit of insight to share

Here are some bullet points that came across my desk today.  I hope they help make some senses out of the passage of the recent Acts.

Highlights of the SECURE Act include:

Age restrictions on contributions to a Traditional IRA have been eliminated

  • For clients born on or after July 1, 1949, the age for starting required minimum distributions
  • (RMDs) has been increased to 72
  • Beneficiary distribution choices for deaths that occur starting in 2020 have been changed/updated
  • Distributions for qualified birth or adoption expenses are penalty-free up to $5,000

Highlights of the CARES Act include:

  • RMDs, including those from Beneficiary IRAs, have been waived for 2020
  • Coronavirus-related distributions (CRDs) are penalty-free up to $100,000 through December 30,
  • 2020
  • CRDs can be repaid over three years, or taxes can be spread over three years