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Lisa J. Montano CPA, PA

Certified Public Accountant

Lisa Montano's Financial Advisory Blog

Tax Season Treasures #1: Retirement Planning

February 22nd, 2015

Last week I met with a client who has had, financially, a very profitable year. After rolling over a 401K from an old employer to an IRA and adding a $4000 deductible contribution for 2013, in 2014 she has since received a 50% pay raise, increasing her salary deferral in the employer’s 401k plan from 3% to 4%. So in general, a good year financially. Understandably, however, this new situation raised many questions for my client. How will the raise affect her tax situation? How the IRA might have performed? Is she spending too much money because her savings hasn’t increased since last year, although it also hasn’tdecreased?

We discussed adding another IRA contribution, starting a planned savings program, and the benefits of her job’s 401k plan. I congratulated her on increasing her participation rate and encouraged her to make it a goal to go even higher, to the highest maximum allowable amount. While she initially grimaced at the idea of putting away even more money, I gave her some advice that is important for everyone to know: even though retirement seems many years away, once it is time to retire it will be a much nicer and more rewarding experience if you start planning intentionally, intelligently, and as early as possible.

Since she is paying most of her bills online she is going to look into the bank’s online expense/budgeting feature which will really help her track and analyze where her money is going. One last bit of advice came when she expressed the desire to travel more, but thought it was too expensive. I told her not to be afraid to take a couple of trips, because she is planning and saving wisely, and she seems to have a good head about her finances, she can afford to enjoy some rewards of her success.

My takeaway from this meeting was this: it is always wise to start planning for retirement early. There is no age too young to begin planning. Find the right plan and steps for you and begin them. You will thank yourself when you reach retirement and have zero worries. Furthermore, if you are planning wisely and understand your finances and your future financial plans, don’t be afraid to enjoy your money a bit and take a trip or two. Your future self will be very grateful.

Tax Season Treasures: Introduction

February 22nd, 2015

One thing I love about being an accountant is having the chance to connect and build relationships with such a unique and varied group of people. From the one hundred and six year old woman with nineteen grandchildren, to the twenty one year old young man fresh out of college, each client has a different story to tell and a different situation in which to learn and collaborate. Last night, while I was meeting with one of my clients, I had an idea. Although each client is unique and no two situations are the same, there are so many things everyone can learn from each other.  I spend hours talking with my clients and I can see just how each situation relates to another. Each person’s questions and solutions can help teach others the proper steps to take, and different tips and basics everyone should know, no matter what their different experiences might be.

With that in mind, I’ve decided to start a blog series entitled Tax Season Treasures in which I will share some valuable insights and tips that I come across while meeting with clients this year. This will allow all of us to learn from each other and grow in order to have the best tax experience possible.

The first story is up on my blog now, follow the link below to read. I will update this post each time a new blog entry is posted. Stay tuned for more updates all throughout this tax season! Happy learning!

  1. Tax Season Treasures #1: Retirement Planning

I’ve Fallen and Still Can’t Get Up (fiscal cliff legislation)

January 2nd, 2013

13th hour fiscal cliff legislation was passed yesterday that raises taxes slightly and postpones automatic spending cuts for two months.  Here are the highlights of the new tax laws:

  • Tax rates remain the same for singles earning up to $400,000 and couples earning up to $450,000. Above this income level, the marginal tax rate rises to 39.6%.
  • Certain personal exemptions are phased out for individuals with $250,000 of taxable income and joint filers with $300,000 or more of taxable income.
  • Capital Gains and Dividend income get a new top bracket of 20% for the highest earners ($400,000 individual taxable income, $450,000 joint). These same earners will be paying a 3.8% healthcare surcharge on investment income.
  • The Alternative Minimum Tax threshold has been permanently indexed to inflation.
  • The Estate Tax exemption has been set at $5 million and the federal tax rate at 40%.
  • The Social Security tax holiday, reducing payroll tax by 2 percentage points, has expired, bringing the payroll tax rate back to 6.2% on the first $113,700 of earned income.
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