A Different Degree of Wealth

Tax Planning for Income

You don’t want to pay more in federal income tax than you have to. With that in mind, here are five things to consider when it comes to keeping more of your income.

1. Postpone your income to minimize your current income tax liability
By deferring (postponing) income to a later year, you may be able to minimize your current income tax liability and invest the money that you’d otherwise use to pay income taxes. And when you eventually report the income, it’s possible that you’ll be in a lower income tax bracket.

Certain retirement plans can help you postpone the payment of taxes on your earned income. With a traditional 401(k) plan, for example, you contribute part of your salary into the plan, paying income tax only when you later withdraw money from the plan (withdrawals before age 59½ may be subject to a 10 percent penalty tax in addition to regular income tax, unless an exception applies). This allows you to postpone tax on part of your salary and take advantage of the tax-deferred growth of any investment earnings.

There are many other ways to postpone your taxable income. For instance, you can contribute to a traditional IRA, buy permanent life insurance (the cash value part grows tax deferred), or invest in certain savings bonds. You may want to speak with a tax professional about your tax planning options.

2. Shift income to family members to lower the overall family tax burden
However, look out for the kiddie tax rules. Under these rules, for children under age 18, or children under age 19 (or full-time students under age 24) who don’t earn more than one-half of their financial support, any unearned income over $2,200 (in 2020 and 2021) is taxed at the parents’ tax rates. Also, be sure to check the laws of your state before giving securities to minors.

Other ways of shifting income include hiring a family member for the family business and creating a family limited partnership. Be sure to investigate all of your options carefully before acting.

3. Deduction planning involves proper timing and control over your income
As a starting point, you’ll have to decide whether to itemize your deductions or take the standard deduction. Generally, you’ll choose whichever method lowers your taxes the most. If you itemize, be aware that some deductions (for example, medical expenses) are allowed only to the extent the deduction exceeds some percentage of your adjusted gross income (AGI). In cases where your deductions are affected by your AGI, you might look at ways to potentially increase your allowable deductions by reducing your AGI. To lower your AGI for the year, you can defer part of your income to next year, buy investments that generate tax-exempt income, and contribute as much as you can to qualified retirement plans.

Because you can sometimes control whether a deductible expense falls into the current tax year or the next, you may have some control over the timing of your deduction. If you’re in a higher federal income tax bracket this year than you expect to be in next year, you’ll want to consider accelerating deductions into the current year. You can accelerate deductions by paying deductible expenses and making charitable contributions this year instead of waiting until next.

4. Investment tax planning uses timing strategies and focuses on your after-tax return
Although income is generally taxable, certain investments generate income that’s exempt from tax at the federal or state level. For example, if you meet specific requirements and income limits, the interest on certain Series EE bonds (these may also be called Patriot bonds) used for education may be exempt from federal, state, and local income taxes. Also, you can exclude the interest on certain municipal bonds from your income (tax-exempt status applies to income generated from the bond; a capital gain or loss realized on the sale of a municipal bond is treated like a gain or loss from any other bond for federal tax purposes). And if you earn interest on tax-exempt bonds issued in your home state, the interest will generally be exempt from state and local tax as well. Keep in mind that although the interest on municipal bonds is generally tax exempt, certain municipal bond income may be subject to the federal alternative minimum tax. When comparing taxable and tax-exempt investment options, you’ll want to focus on those choices that maximize your after-tax return.

In most cases, long-term capital gain tax rates are lower than ordinary income tax rates. That means that the amount of time you hold an asset before selling it can make a big tax difference. Since long-term capital gain rates generally apply when an asset has been held for more than a year, you may find it makes good tax-sense to hold off a little longer on selling an asset that you’ve held for only 11 months. Timing the sale of a capital asset (such as stock) can help in other ways as well. For example, if you expect to be in a lower income tax bracket next year, you might consider waiting until then to sell your stock. You might want to accelerate income into this year by selling assets, though, if you have capital losses this year that you can use to offset the resulting gain.

Note: You should not decide which investment options are appropriate for you based on tax considerations alone. Nor should you decide when (or if) to sell an asset solely based on the tax consequence. A financial or tax professional can help you decide what choices are right for your specific situation.

5. Year-end planning focuses on your marginal income tax bracket
Year-end tax planning, as you might expect, typically takes place in October, November, and December. At its most basic level, year-end tax planning generally looks at ways to time income and deductions to give you the best possible tax result. This may mean trying to postpone income to the following year (thus postponing the payment of tax on that income) and accelerate deductions into the current year. For example, assume it’s December and you know that you’re in a higher tax bracket this year than you will be in next year. If you’re able to postpone the receipt of income until the following year, you may be able to pay less overall tax on that income. Similarly, if you have major dental work scheduled for the beginning of next year, you might consider trying to reschedule for December to take advantage of the deduction this year. The right year-end tax planning moves for you will depend on your individual circumstances.

Have a fantastic weekend!

Source: Broadridge

Golf Tip of the Week

Golf Fitness: 3 Easy Warm-Up Stretches to Improve Flexibility

A little stretching can go a long way for your golf fitness and golf swing. Whether at the golf course, at home, or elsewhere, here are three easy stretches that will warm up your golf muscles and prepare you to make a fuller golf swing.

As shown in the video by golf fitness trainer Mike Pedersen, all you need is a golf club, comfortable clothing and shoes, and 5 to 10 minutes.

Exercise 1: Shoulder Raises
Grip your golf club with both hands (overhand) slightly wider than shoulder width. Raise the club to your chest, then down to your legs, and repeat, going slightly higher each time (until you feel uncomfortable going higher). Medium speed. 10 repetitions.

This exercise will loosen your shoulders and improve range of motion.

Exercise 2: Rotations
Gripping the club in the same way as for the first exercise, get into your golf posture (as if you’re preparing to hit a shot). Then rotate back and through like you would for a golf swing, but easy does it. Be fluid. Start short and gradually rotate more to a full swing. 10 repetitions.

This exercise will loosen your core and back.

Exercise 3: Partial Toe Touches
Using the same grip with your golf club, keeping your legs straight, bend at your waist until the club goes down to your knees. Then try going lower and lower, as long as it doesn’t feel uncomfortable. 10 repetitions.

This exercise will stretch and loosen your lower back.

Tip adapted from golfdiscount.comi

Recipe of the Week

Baked Parmesan-Crusted Chicken

6 Servings


•          ¾ cup butter

•          2 cloves garlic, minced

•          1 cup dry bread crumbs

•          ⅓ cup grated Parmesan cheese

•          2 tablespoons chopped fresh thyme

•          2 tablespoons chopped fresh basil

•          2 tablespoons chopped fresh oregano

•          ¼ teaspoon pepper

•          ½ teaspoon salt

•          6 (4 ounce) skinless, boneless chicken breast halves


  1. Preheat oven to 350 degrees F (175 degrees C).

  2. Melt the butter with the garlic in a saucepan over medium heat. When the butter starts to bubble, remove from the heat and allow to cool slightly. Stir the breadcrumbs together with the Parmesan cheese, thyme, basil, oregano, pepper, and salt in a bowl. Dip the chicken breasts in the butter, then press into the seasoned breadcrumbs. Place the chicken into a 9×13 inch baking dish.

  3. Bake in the preheated oven until the chicken is golden brown and no longer pink in the center, 50 to 55 minutes.

 Recipe adapted from the allrecipes.comii 

Health Tip of the Week

9 Healthy (and Delicious) Ways to Hack Your Desserts for a Nutritional Boost

Whether you’re a die-hard dark chocolate fan, a pumpkin pie devotee, or someone who swears by restorative effects of rocky road ice cream, there are a number of clever ingredient swaps – plus additions you can stir into your batter – that will significantly boost the nutritional value of your favorite dessert. Just ask Samantha Cassetty, MS, RD, nutrition expert and co-author of Sugar Shock. Here are nine healthy ways to hack your treat to make it that much better – for you and your tastebuds – according to Cassetty.

1.         Replace butter with pureed avocado

2.         Slip in some chickpeas

3.         Add walnuts

4.         Make a chia or flax egg

5.         Swap empty carbs with nutrient-rich ones

6.         Reduce the added sugar in recipes

7.         Be strategic with chocolate chips

8.         Transform your fruit

9.         Make minis

Tip adapted from realsimple.comiii 

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Securities through Triad Advisors, LLC, Member FINRA / SIPC. Advisory services through Ballentine Capital Advisors, Inc. Triad Advisors, LLC and Ballentine Capital Advisors are not affiliated entities. Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

The articles and opinions expressed in this newsletter were gathered from a variety of sources but are reviewed by Ballentine Capital Advisors prior to its dissemination. All sources are believed to be reliable but do not constitute specific investment advice. In all cases, please contact your investment professional before making any investment choices.

Securities through Triad Advisors, LLC, Member FINRA/SIPC. Advisory services through Ballentine Capital Advisors, Inc. Triad Advisors and Ballentine Capital Advisors are not affiliated entities.


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