Ask the CFP: Should I buy cryptocurrency?

Hello everyone and welcome to this month’s Ask the CFP segment. This month’s question is, “Should I buy cryptocurrency?” It’s safe to say that most people know what Bitcoin is today, even if they don’t fully understand how it works. Although Bitcoin is by far the most popular cryptocurrency today, there are over 4,000 different cryptocurrencies around the world. With this relatively new market valued at billions of dollars, should you put your dollars at risk and buy crypto?

While the technical details of cryptocurrency are beyond the scope of this video, let’s first remember that these are digital assets driven by supply and demand. The point of these digital coins was to create a currency system that doesn’t depend on a centralized bank such as the Federal Reserve. Some holders of cryptocurrencies are attracted to their relatively higher degree of anonymity, substitution for traditional money issued by government banks and their perceived value as a hedge against inflation. While there are indeed some aspects of cryptocurrency that are attractive compared to fiat currencies like the US dollar, the crypto market is still in an early stage with many unknowns.

First, while I’m sure there are examples out there, I have yet to personally meet anyone that has actually used crypto to buy anything. I know many people that own cryptocurrencies but using them to buy a car or a sandwich is another story. The success of this industry depends on people to use, trust and rely on these digital coins as a means of payment. Second, if someone has an unrealized gain on their crypto holdings and decides to exchange it for another crypto, exchange it to dollars or use it to buy something, they must pay taxes on the gains. This tax consequence may be a deterring factor to selling, exchanging or spending crypto. Third, regulation of crypto is uncertain and continually evolving. The Securities and Exchange Commission currently views both Bitcoin and Ethereum, the two largest cryptos by volume, as commodities. This makes sense because, like gold, silver and palladium, cryptos are valued by supply and demand. They can experience wild swings in value and they don’t pay a dividend, produce a product or have employees like a company would. With these attributes, they’re essentially a commodity.

Some cryptos like Bitcoin and Ethereum have certainly experienced rapid growth and we’ve all heard the stories of people who have either become wealthy or lost tremendously because of it. While it’s hard to say what may happen with these two examples in the future, it’s very likely some form of cryptocurrency is here to stay. The Federal Reserve Bank is considering establishing a digital currency of its own for reasons such as instant electronic payments. This would also put pressure on the adoption rate of other cryptocurrencies.

Overall, remember that cryptos are not an investment. They’re speculative and you should expect volatility if you decide to buy them. If you would like more information on this topic, we also have a report with greater detail, including ways you can access cryptocurrencies if you’re interested. Just send an email to TFreeman@MonetaGroup.com and we’ll respond with the report. Thanks for watching and we’ll see you next month.

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Please speak with a qualified tax or legal professional before making any changes to your personal situation. Moneta does not offer investment advice regarding cryptocurrencies and does not bill clients for the education it may provide them on crypto markets. Given the dynamic nature of the subject matter and the environment in which these materials were prepared, they are subject to change as additional information and analyses comes forth. Nothing contained herein represents an offer to sell or buy cryptocurrencies or any other commodities or securities, nor does it represent any specific recommendation.

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Five simple year-end tax planning moves

By Lauren Hunt, Moneta Advisor

With year-end quickly approaching, taxpayers still have a few months left to plan ahead with strategies that could provide meaningful tax savings.

1. Increase your 401(k) contributions

For the 2021 tax year, the maximum contribution to a 401(k) retirement plan is $19,500 for individuals under age 50. People ages 50 and above can make a “catch-up” contribution of an extra $6,500, for a total of $26,000. By making voluntary contributions to a Traditional 401(k) plan, you’re reducing your taxable income; so, the more you contribute, the more you lower your tax bill. Consider increasing your contribution elections during the month of December and review your elections again in January to spread out your contributions throughout the next year.

2. Charitable Contributions

If you contribute to a qualified charitable organization, you generally can claim your contribution as an itemized deduction on Schedule A. You can also donate appreciated securities in lieu of a cash donation. In 2021, as part of the Consolidated Appropriations Act, $300 of charitable cash contributions made to qualifying organizations are allowed as an “above-the-line” deduction for taxpayers that claim the standard deduction ($600 if married filing jointly). Just be sure to make your charitable contributions by December 31 as there’s no grace period if you make them after year-end.

3. Tax-Loss Harvesting

When the price of stocks and mutual funds in a taxable brokerage account declines below their cost basis, you can sell them before the end of the year to capture the loss and, at the same time, exchange them into a similar investment to maintain market participation. By doing this, you capture those losses on paper so they are reported on your tax return. To the extent realized losses exceed realized gains, net realized losses can offset up to $3,000 of ordinary income with any remainder resulting in a loss carryforward to be used in future years.

4. Convert IRA savings to a Roth IRA

Depending on your income, it could be wise to convert money into a Roth IRA. While you must pay ordinary income taxes today on dollars converted, monies inside a Roth IRA benefit from income tax-free accumulation indefinitely. In general, the more time you have to allow for the funds to compound income tax-free within the Roth IRA, the more compelling a Roth IRA conversion becomes.

5. Start Organizing

Employers and other entities must send copies of 1099s and W-2s to recipients by January 31. Start gathering your current tax year’s tax payments and any documentation you have for tax credits and deductions. If you start gathering your tax-related documents now, you’ll set yourself up for a stress-free tax day.

We recommend consulting with an appropriately credentialed professional before making any financial or tax-planning related decision.

© 2021 Moneta Group Investment Advisors, LLC. All rights reserved. These materials were prepared for informational purposes only. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. These materials do not take into consideration your personal circumstances, financial or otherwise.

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Diane Compardo Snags 3 Barron’s Top Advisor Rankings in 2021

Barron’s is the latest high-profile news publication to recognize Diane Compardo, CFP®, CPA, PFS, AWMA®, and Founding Partner of Compardo, Wienstroer, Conrad & Janes (CWCJ) at Moneta, as a top financial advisor in the U.S.

For the third year in a row, Diane has been named to the exclusive list of Top 100 Independent Advisors by Barron’s. In this year’s ranking, Diane is the top-ranked female advisor of Missouri and No. 85 overall. This prestigious title recognizes top advisors throughout the nation for their work with a variety of clients with evolving needs. Diane has over 30 years of industry experience with her team collectively overseeing $2.2 billion in assets. CWCJ consists of 25 professionals serving approximately 300 households. Learn more about Diane’s work with clients in this recent Barron’s Advisor Q&A.

In addition to being recognized in Barron’s, this distinction is covered in its notable sister publication, The Wall Street Journal, published in the September 23 edition.

This recognition is only the latest in 2021 for Diane. It comes on the heels of her inclusion in Barron’s list of Top Women Financial Advisors for the sixth consecutive year. Among those named, Diane is the only advisor from Missouri.

Barron’s also recognized Diane on the 2021 Top Advisor Rankings by State list for the fourth year in a row. Diane is acknowledged as the top female advisor in the state and No. 4 overall in Missouri. This ranking was established by utilizing data collected from nearly 4,000 advisors across the country.

All of Barron’s top advisor rankings are determined by a combination of factors, including assets under management, revenue generated and advisor practices. The lists serve as a spotlight for the country’s top wealth professionals.

In addition, Diane was recognized in Forbes’ 2021 Top Women Wealth Advisors ranking earlier this year. She came in second in Missouri and No. 65 overall, out of the 1,000 advisors included. Diane’s exceptional work has landed her an appearance on this list every year since its inception.

Those recognized on the Forbes’ list have shown continued strength through the past year of volatility and challenges. The ranking is determined through various factors, including interviews, experience, revenue and assets under management.

Neither Barron’s nor Forbes received a fee in exchange for rankings.

Compardo has successfully established herself and her team as a trusted provider of comprehensive financial planning and family office services to senior corporate executives, successful entrepreneurs and a growing number of ultra-affluent, multi-generational families located throughout the United States.

Compardo, Wienstroer, Conrad & Janes’ deep bench of highly credentialed and diverse professionals allows us to provide a truly comprehensive and personalized client experience. We serve family office, professional athletes and family CFO clients. You can visit our website here.

For media inquiries contact us here.

© 2021 Moneta Group Investment Advisors, LLC. All rights reserved. These materials were prepared for informational purposes only based on materials deemed reliable, but the accuracy of which has not been verified; trademarks and copyrights of materials linked herein are the property of their respective owners. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. These materials do not take into consideration your personal circumstances, financial or otherwise.

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Barron’s again ranks Moneta among nation’s Top 10 RIAs for combination of quality and scale

Moneta’s unwavering commitment to operate with a client-first approach continues to elevate the firm nationally as 2021 marks the fifth year in a row Barron’s ranked Moneta in the Top 10 of its Top 100 RIA Firms.

Moneta immediately stands out on this list because of its quality-over-quantity approach that allows Moneta to offer clients a combination of personal attention and large-scale resources that is rare among its competition. Moneta’s 42:1 client-to-advisor ratio is the lowest among all the Top 10 RIAs. Only one other Top 10 firm is lower than 100:1 and the Top 5 firms average a client-to-advisor ratio of 991:1.

“Earning a Top 10 ranking for five straight years with such a low client-to-advisor ratio makes us an anomaly in our industry,” Moneta CEO Eric Kittner said. “We don’t have the pressure of shareholders or investors demanding growth at a pace that may not be what’s best for our clients. We do not ever want to over-extend our resources to compromise the high level of service we provide. Operating in a highly regulated industry, consistency is mandatory and we ensure that for our clients.”

© 2021 Moneta Group Investment Advisors, LLC. All rights reserved. Moneta Group Investment Advisors, LLC is an SEC registered investment advisor and wholly owned subsidiary of Moneta Group, LLC.  Registration as an investment advisor does not imply a certain level of skill or training. Moneta is a service mark owned by Moneta Group, LLC.

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Proposed Tax Legislation Establishes Need For Estate Planning

By Mark Conrad CPA, CFP®, Benjamin Trujillo, JD, LLM, Matt Schaller, MBA, CFA, CFP®, Abby Donnellan CPA, and Anna McDonald

The House Ways and Means Committee on September 12, 2021, released new details for a potential $3.5 trillion budget reconciliation bill.  Since this is merely a proposal at this point, it’s impossible to know which provisions of the bill will ultimately become law, though there are important takeaways from the Committee’s release.

High-income and high-net worth individuals should expect a dramatic change in the tax and estate planning landscape.

Couples with estates exceeding $12 million and individuals with estates exceeding $6 million need to contact an advisor if they have not engaged in estate planning.

While we are likely a few months from a final tax overhaul, a good way to evaluate what will eventually become law is to look at some similarities between The House Ways and Means Committee plans this week and the Senate suggestions earlier this spring.

“If we look to similarities between the House and Senate, I think that’s where there is a higher likelihood of something passing,” said  Benjamin Trujillo, JD, LLM, Senior Advisor with Compardo, Wienstroer, Conrad & Janes at Moneta (CWCJ).  “While we can’t be certain about what will actually become law, the cross-over points between the bills are a great place to start. I think we can expect more clarity on this in early November.”

Until then, three important similarities have emerged.

Tax Increases For High-Income Taxpayers

Both proposals include raising the top tax rate. The new rate would affect married couples who have a taxable income over $450,000 and individuals with income over $400,000.

Capital Gains Increases

Both the House and Senate have discussed increasing capital gains taxes, likely for anyone with over $1,000,000 of income.

“An increase to the capital gains rate was initially one of President Biden’s most significant proposals in his original tax plan,” said Abby Donnellan CPA, Advisor at CWCJ. “The plan had removed the preferred capital gain rates entirely, increasing capital gain rates to a top marginal rate of 37% (before any increase to the marginal tax rate mentioned above). Long-term Capital gain rates currently top out at 20%, signifying a large potential rate increase. However, the rate proposed by The House Ways and Means Committee was 25%, an increase of only 5%, which would be a relief for a lot of taxpayers with huge, appreciated stock holdings.”

While increasing the rate to match the ordinary income rates has been discussed, it seems more likely to increase it from 20% to 25%.  This would not include the existing 3.8% net investment income tax.  Add in state taxes (where applicable) and capital gains rates can be expected to be over 30% for those making over $1,000,000.

There has also been talk of when the rate will be effective, with the possibility floated out there to make it retroactive.  While the increase does seem likely, it seems to be very tough sell to make it retroactive, if for no other reason than the complications the IRS would have to deal with when it comes to reporting.

“For those making over $1,000,000, it would be wise to examine your existing portfolio and consider taking gains this year, where appropriate,” said Matt Schaller, MBA, CFA, CFP®, Advisor with CWCJ. “It may also make sense to shift assets that are less tax efficient into qualified accounts while keeping non-qualified accounts in more tax efficient investment vehicles.”

Charitable contributions are another way to offset capital gains.

“Individuals with a high net worth, to the extent you have large, unrealized gains in the portfolio it can be advantageous from a tax perspective to utilize a Donor Advised Fund or Family Foundation to safeguard yourself and your family from the capital gains tax,” said Partner Mark Conrad CPA, CFP®.

Corporate Taxes Will Increase

The House and Senate are also on the same page with corporate taxes.  While initial discussions centered around a 28% corporate rate, it seems that 26.5% is more likely to pass both chambers.  For reference, this is higher than the current rate of 21%, but lower than the 35% rate corporations were paying prior to the Tax Cuts and Jobs Act (TCJA).

“It will be interesting to see how the increase in corporate taxes filters through to the economy,” noted Schaller. “It will affect corporate profits, but will it do so enough to slow GDP growth?  Will companies increase prices in order to keep profitability higher, which may lead to higher inflation?  These will be important topics to watch.”

Where is the SALT Cap?

One priority left unaddressed in both the House and Senate proposals it the repeal of the cap on State And Local Tax (SALT) deductions.

“It is kind of surprising, one of the things not in either bill is the repeal of the SALT limitations,” Trujillo said.  “We expected to see them removed and they were not addressed in either bill.”

In the 2017 Tax Cuts and Jobs Act (TCJA), legislators put limitations on how much an individual could deduct for state and local taxes paid. “They capped it at $10,000,” Trujillo said. “This meant if you paid more than $10,000 on state income, real estate, or personal property taxes combined, you couldn’t deduct the amount over $10,000. We expected this would be a priority and it wasn’t in either proposal.”

One final similarity, “Both the senate and the house have some flavor of a wealth tax,” said Trujillo. “The House proposal would target people who make more than $5 million a year by applying a 3% surcharge tax.”

Compardo, Wienstroer, Conrad & Janes has significant experience guiding multi-generational families through successful wealth transfers.

“We never let taxes drive all the financial decisions we make,” Conrad said. “However, in the event you can find tax efficient strategies, it will benefit the overall portfolio and help to maintain generational wealth.”

There are a lot of proposals and opinions as to what will eventually become law, through our significant experience at CWCJ we understand it is better to plan now if you know you could be affected by these changes. If you have an estate above $6 million, or $12 million for a couple, please contact an advisor from Compardo, Wienstroer, Conrad & Janes to discuss the options you have available.

Our staff of diverse professionals stays informed to help you make better financial decisions. We serve Family Office, Professional Athletes and Family CFO clients. You can visit our website here. For media inquires contact us here.

© 2021 Moneta Group Investment Advisors, LLC. All rights reserved. These materials were prepared for informational purposes only based on materials deemed reliable, but the accuracy of which has not been verified; trademarks and copyrights of materials linked herein are the property of their respective owners. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. These materials do not take into consideration your personal circumstances, financial or otherwise.

 

 

 

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source https://monetagroup.com/blog/cwcj-proposed-tax-legislation-establishes-need-for-estate-planning/

What You Need to Know About the New Tax Policy Proposals in Washington

The House Ways and Means Committee released its tax policy proposals on Monday, September 13 with many differences from President Biden’s proposals and some items previously suggested by Senators.

At this point, these are merely proposals under consideration that may change. We are still in the early stages and don’t know which provisions are likely to make it through the legislative process into law.

As we closely watch these developments and begin to form strategies around the potential changes, the high-level takeaway right now is that two groups of people in particular should anticipate and begin planning with their financial advisor for tax increases:

• Individuals with estates exceeding $6 million and couples with estates exceeding $12 million
• Individuals with annual incomes exceeding $400,000

The most likely tax changes figure to come in form of increased rates for corporate taxes and capital gains.

The higher estate and gift tax exemption was already scheduled to sunset after 2025.  This most recent proposal is moving that sunset forward to expire after 2021.

All the different plans have proposed tax increases on those earning more than $400,000 to pay for other government expenditures. There seems to be agreement on increasing the top marginal tax bracket rate and increasing the top rate on capital gains, but not the exact rate or income level.

One other highly anticipated and relevant topic that was not mentioned among the proposals was the limitation of state and local tax (SALT) deductions. A separate press release went out stating that any changes on this front still need to be negotiated, so we still currently lack an indication of how that may turn out.

There seems to be more agreement about increasing corporate tax rates from the current 21% level (with pushback from some), but now there are disagreements about how much to increase those rates, with both tiered rates going up to 26.5% and a flat 28% rate in the proposals.

What we’ve mentioned here is only the tip of the proverbial iceberg. The many details and nuances of these proposals are still fluid. It’s difficult to even project an anticipated timeline for the legislative process, but we can use 2017 as a point of reference with negotiations lasting through mid-October and the final bill being signed just before Christmas. There is pressure on Congress to come to an agreement earlier because there is also a separate infrastructure bill that needs to be approved, but there are still many disagreements between the House and Senate members that need to be reconciled.

We will continue to monitor the tax news coming out of Washington and notify you of anything that requires additional planning. Please don’t hesitate to contact your financial advisor if you have any questions about how this news impacts your specific financial situation.

© 2021 Moneta Group Investment Advisors, LLC is an SEC registered investment advisor and wholly owned subsidiary of Moneta Group, LLC. Registration as an investment advisor does not imply a certain level of skill or training. These materials were prepared for informational purposes only based on materials deemed reliable, but the accuracy of which has not been verified. Given the dynamic nature of the subject matter and the environment in which these materials were prepared, they are subject to change as additional legislation and government analysis come forth. This is not an offer to sell or buy securities. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. These materials do not take into consideration your personal circumstances, financial or otherwise.

The post What You Need to Know About the New Tax Policy Proposals in Washington appeared first on Moneta | Fee Only Financial Planning | Investment Advisors | Clients Nationwide.

source https://monetagroup.com/blog/cwcj-32104/

Diane Compardo Again Recognized by Forbes Shook as Highest Ranked Female Advisor in Missouri

ST. LOUIS –  For the fourth year in a row Diane Compardo, CPA, CFP®, PFS, AWMA, has been named to the Forbes SHOOK annual Best-in-State Wealth Advisors rankings.

The fourth annual Best-in-State Wealth Advisors is one of the most popular advisor lists by SHOOK each year.  The state ranking covers 5,224 of the best financial advisors in the nation with Missouri having 73 advisors on the list. This year Compardo is ranked fourth on the list.

Compardo has been named to the prestigious list all four years since the inception of the list while also being recognized as Missouri’s highest-ranked female advisor. 

This year SHOOK Research, the  firm responsible for researching, interviewing, and assigning a ranking to advisors who have been nominated for the ranking, stated their research process found the very best advisors are “laser focused on having a positive impact on their clients’ lives.”

“It is an honor to be recognized and included with many distinguished peers,” said Compardo. “My team and I are so grateful for the trust our client families have placed with us the past 25 years.”

Each wealth advisor included on Forbes’ list by Forbes was researched, interviewed and assigned a ranking within their respective states and markets. The selection and ranking process was done through SHOOK Research using an algorithm of both qualitative and quantitative criteria, including in-person interviews, industry experience, compliance records, revenue produced, assets under management and more.

More female advisors in 2021 were ranked than last year. In 2021 Female advisors accounted for 800 participants. In 2020 there were 555 women advisors ranked.

Neither Forbes nor SHOOK Research receive a fee in exchange for rankings.

Compardo has successfully established herself and her team as a trusted provider of comprehensive financial planning and family office services to senior corporate executives, successful entrepreneurs and a growing number of ultra-affluent multi-generational families located throughout the United States.

Compardo, Wienstroer, Conrad & Janes’ deep bench of highly credentialed and diverse professionals allows us to provide a truly comprehensive and personalized client experience. We serve Family Office, Professional Athletes and Family CFO clients. You can visit our website here.

For media inquiries contact us here.

© 2021 Moneta Group Investment Advisors, LLC. All rights reserved. These materials were prepared for informational purposes only based on materials deemed reliable, but the accuracy of which has not been verified; trademarks and copyrights of materials linked herein are the property of their respective owners. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. These materials do not take into consideration your personal circumstances, financial or otherwise.

 

 

 

 

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source https://monetagroup.com/blog/cwcj-diane-compardo-named-to-forbes-2021-best-in-state-wealth-advisors-list/