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Financial
Mar 15, 2015

Financial Planning Considerations For 2015

Sponsored Content provided by Susan Willett - Director of Trust Services, Old North State Trust, LLC

Some of us may be thinking about 2014 as the tax-filing deadline approaches, but now's the time to discuss financial planning considerations for 2015.

  1. Be aware of IRS changes. All of the major income provisions from 2014 have been reinstated for 2015, including deductions for college tuition and direct payouts from IRAs to charities of up to $100,000 for those over 70 ½. Also, beware of calls claiming to come from the IRS. Reports of con artists impersonating IRS officials are on the rise! The IRS will generally not contact you by phone. These scammers are getting bolder and trying to play on fear.
     
  2. Speaking of IRAs … the rules have been tightened in recent legislation concerning rollovers. Starting this year, those individuals with multiple IRAs can only execute a rollover once every 12 months. Trustee to trustee transfers are not subject to this rule, so be careful how you move these accounts.
     
  3. IRAs on the brain. Review your IRA beneficiary designations. A spouse has the ability to roll over an inherited IRA to his or her own name, but non-spouse beneficiaries have a few more rules. They may face an accelerated payout (i.e. taxation) of the IRA. If the account is titled correctly, it is possible to take the required distributions over a longer period of time. If a charity is named as a beneficiary, this also can speed up the distributions.
     
  4. Give, give, give. The annual gift exclusion remains at $14,000, but that is per person, and married couples can split the gift (each gives $14,000 per person, even if the funds only come from one spouse). Payments made directly to the institution for education and medical expenses are excluded from the annual amount. There is even a credit for pre-aid tuition expenses, if paid for courses that begin within the first few months of the next year.  
     
  5. Charities count. Gifts to charities not only make you feel good, but count as deductible expenses. Certain types of trusts that benefit charities are also a great way to extend your legacy, help your favorite charity and get a deduction!
     
  6. Life insurance coverage. There has been a lot of emphasis placed on health care and insurance lately. A review of your life insurance could prove invaluable, especially if you bought a variable policy. You may end up needing to make additional premium payments or paying premiums for longer than anticipated. If the product was purchased during a high interest-rate period, the illustration created at that time may have used a higher growth rate than we have experienced in the last few years. Even a slight variance from the original illustration could make a significant difference over the life of the policy.
     
  7. The new kid on the block – health coverage. Penalties are introduced this year for those without health coverage, which range from the basic- $325/person to an income based penalty – 2 percent of excess income over the minimum level of filing income levels. There are caps on the penalties.
Old North State Trust, LLC (ONST) periodically produces publications as a service to clients and friends. The information contained in these publications is intended to provide general information about issues related to trust, investment and estate related topics. Readers should be aware that the facts may vary depending upon individual circumstances. The information contained in these publications is intended solely for informational purposes, is proprietary to ONST and is not guaranteed to be accurate, complete or timely.
 
Susan Willett is the director of trust services and oversees all aspects of trust administration for Old North State Trust, LLC. Old North State Trust, a North Carolina chartered trust company, provides: asset management services; income, estate and trust tax consulting; retirement planning and administration; and trustee and estate services to both individuals and businesses. Old North State Trust professionals have many years of experience and for over a decade have assisted clients in identifying and reaching their financial goals. For more information, visit www.oldnorthstatetrust.com or call 910-399-5470.

 

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