Do Good … and Give Yourself a (Tax) Break

If you read this post  from Matt Grodin, CPA, you know that recent changes in the federal tax law have resulted in fewer deductions at tax time for many California taxpayers.

You can, however, secure an increasingly elusive tax break if you bunch your charitable gifts into one tax year.  Through a philanthropic vehicle called a donor-advised fund, the donor receives the tax benefit in the year of the contribution to the donor-advised fund while retaining the ability to donate the proceeds over time and to charities of their choosing. The National Philanthropic Trust describes donor-advised funds as “a charitable savings account.” (more…)

Saving for Private Kindergarten? Yes, It’s a Thing. And You Should Consider It.

You have no idea where your toddler or preschooler will attend college—though you might be hoping they choose your alma mater—but you might already be thinking about your options for their kindergarten, primary and secondary education.

If non-public school is on your radar, you can fund a good chunk of their tuition with a 529 plan similar to the one you’ve set up for them for college. Thanks to changes in the federal tax code that took effect Jan. 1, 2018, you can make tax-free withdraws of up to $10,000 a year for pre-college tuition at private schools. Parochial school tuition is eligible as well. (more…)

I Feel Weird Saying This, But I Have Too Much Money

Dear Emilie: I’m panicking because I’m sitting on a pile of cash and feel paralyzed. What should I do with it? Save it for an emergency? Pay down my mortgage? Invest it? – Super Saver

Dear Super Saver: This is a good problem to have! Let’s set some priorities for using this money wisely and minimizing taxes.

First, do you have an emergency fund of readily accessible cash? Set aside three to six months of living expense in a money market fund or savings account. This is the money you can easily tap to cover living expenses if you lose your job. (more…)

The Life-Changing Magic of Tidying Up Your Estate Plan

“Does it spark joy?” That’s what Japanese organizing guru Marie Kondo says you should ask yourself when you’re deciding whether to keep each item in your home. The author of “The Life-Changing Magic of Tidying Up” says that if something doesn’t bring you happiness, you should set it free so it can delight someone else.

I doubt that anyone would say that their estate plan “sparks joy.” That doesn’t mean you need to get rid of it, though! But these documents, like your possessions, should be reevaluated periodically. (more…)

Hey Kids, Here’s How Much Money We Have…

As parents, we want to shield our children from so many of the harsh realities of the adult world. Sometimes we try to “protect” our kids from other facts, too, even benign ones. Many parents resist or avoid telling their children what they earn or how much money they have saved for college.

Some parents feel uncomfortable revealing this information. Perhaps they fear they might be judged or questioned. Maybe they wish they had tucked away more. If teens have their sights set on an expensive college, their parents may be reluctant to explain that a school is financially out of reach. (more…)