Momentum - Business to Business Online Magazine MOMENTUM April 2019 | Page 22
FINANCIAL FOCUS
ROY SALAS
Financial Advisor
Edward Jones
www.edwardjones.com
Put Together a
PROFESSIONAL TEAM to
Help You Reach Your Goals
A
s you work toward achieving your goals
in life, you will need to make moves that
contain financial, tax and legal elements, so
you may want to get some help – from more
than one source.
Specifically, you might want to put together a
team comprised of your financial advisor, your CPA or
other tax professional, and your attorney. Together, this
team can help you with many types of financial/tax/legal
connections.
For starters, you may decide, possibly upon the
recommendation of your financial advisor, to sell some
investments and use the proceeds to buy others that
may now be more appropriate for your needs. If you
sell some investments you’ve held for a year or less and
realize a capital gain on the sale, the gain generally will
be considered short-term and be taxed at your ordinary
income tax rate. But if you’ve held the investments for
more than a year before selling, your gain will likely be
considered long-term and taxed at the lower, long-term
capital gains rate, which can be 0%, 15% or 20%, or a
combination of those rates.
On the other hand, if you sell an investment and
realize a capital loss, you may be able to apply the loss
to offset gains realized by selling other, more profitable
investments and also potentially offset some of your
ordinary income. So, as you can see, the questions
potentially raised by investment sales – “Should I sell?”
“If so, when?” “If I take some losses, how
much will they benefit me at tax time?” –
may also be of importance to your tax advisor, who will
need to account for sales in your overall tax picture. As
such, it’s a good idea for your tax and financial advisors
to communicate about any investment sales you make.
Your tax and financial advisors also may want to be
in touch on other issues, such as your contributions to a
retirement plan. For example, if you are self-employed
or own a small business, and you contribute to a SEP-
IRA – which is funded with pre-tax dollars, so the more
you contribute, the lower your taxable income – your
financial advisor can report to your tax advisor (with
your permission) how much you’ve contributed at given
points in a year, and your tax advisor can then let you
know how much more you might need to add to move
into a lower tax bracket, or at least avoid being bumped
up to a higher one. Your financial advisor will be the one
to recommend the investments you use to fund your
SEP-IRA.
Your financial advisor can also help you choose
the investment or insurance vehicles that can fund an
estate-planning arrangement, such as an irrevocable
living trust. But to establish that trust in the first place,
and to make sure it conforms to all applicable laws,
you will want to work with an attorney experienced in
planning estates. Your tax professional may also need
to be brought in. Again, communication between your
various advisors is essential.
These are but a few of the instances in which your
financial, tax and legal professionals
should talk to each other. So, do
what you can to open these lines of
communication – because you’ll be
one who ultimately benefits from this
teamwork.
Edward Jones, its employees and financial
advisors cannot provide tax or legal advice. You should
consult your attorney or qualified tax advisor regarding
your situation.
This article was written by Edward Jones for use by your
local Edward Jones Financial Advisor.
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MOMENTUM