November 2016 Letter

As the year winds down, please take a moment to review your situation. This is especially true if you have students that will be attending college during the 2017/2018 school year as the Federal College Aid Package is now open for submission. 2017 tax figures and some suggestions to help protect yourself from a new area of cyber security risk round out this month's newsletter.

Should you know of someone who may benefit from this information please feel free to forward this newsletter to them.

NEW! College Aid Financial Package (FAFSA) Timing

Annual FAFSA filing availability is now

If you have a child in college or entering college during the next school year, you need to read this. The time to apply for federal financial aid is now.
The new application timeframe The Free Application for Federal Student Aid (FAFSA) is now available for the 2017 - 2018 school year. The FAFSA application process opened on October 1st. This is a major departure from prior years when the new application was made available three months later, on January 1st. The time to file is now The earlier you file your application, the earlier you will receive aid packages from most participating schools. The application is used to receive grants, federal loans, and work study awards. Here are some hints to make sure the application process works in your favor.
Create your signature PINs. If you have not already done so, both the student and parent will need to set up an electronic signature within the FAFSA system. You cannot submit the FAFSA form without this. File the FAFSA early! As soon as possible, fill out and submit your FAFSA. Your current and prospective college student will start to see reminders to communicate this filing date change. Filing early maximizes your chances of receiving aid. It also minimizes your chances of missing an unknown application deadline. Getting tax records is now easier. With this earlier timing, you can now use last year's (2015) tax information when filling out the application. There are IRS tax return data retrieval tools within the online application to automate this process. Let your advisor know. If you have a child ready to attend college, stay in touch with your financial advisor. Managing your assets to present a good financial picture starts before your student's junior year in high school. Collect needed information. To fill out a FAFSA you will need the following; Student and parent Social Security Numbers Driver's license Federal tax information for the student and parent Record of any untaxed income (excluding retirement account balances) Balances of the following Cash, savings and checking accounts Investment asset balances Other assets FAFSA PIN
Filling out the form can be a daunting task for the uninitiated, but with proper preparation you can get your form done in quick order.

Breaking News: 2017 Retirement Contribution & Social Security Limits

If you have not already done so, now is the time to plan for contributions into your retirement accounts in 2017. Retirement Contribution Limits Retirement Program 2017 2016 Change Age 50 or over catch up IRA: Traditional $5,500 $5,500 none add: $1,000 IRA: Roth $5,500 $5,500 none add: $1,000 IRA: SIMPLE $12,500 $12,500 none add: $3,000 401(k), 403(b), 457 plans $18,000 $18,000 none add: $6,000 Social Security Item 2017 2016 Change Comment Wages Subject to Social Security $127,200 $118,500 +$8,700 Annual Social Security employee tax: $7,886.40 Average Estimated Monthly Retirement Benefit $1,360 $1,355 +$5 Change in estimated amount Don't forget to account for any matching programs offered by your employer as you determine your various funding levels for next year.

Change Your Passwords Now

New internet vulnerability discovered

A recent internet attack in the eastern United States by hackers opens up a new area of vulnerability for all of us. Here is what you need to know.
What is new This recent cyber attack hijacked many computing devices. The attack took over these devices and used their computing power to attack a large internet provider. The result was some large service providers having their sites slow to a crawl and temporarily shut down from this massive attack. The new, and disturbing, change is what kinds of computing devices are now being taken over. They are non-computer devices with internet connectivity. They include things like baby monitors, home security systems, and smart TVs. This new technology is targeting devices that traditionally have low or no security measures in place. Change your password
The biggest thing you can do to protect yourself is to make it a habit to change the passwords on all your devices. Here are some other suggestions.

	Identify your devices. Go through your home and create a list of all devices that could be vulnerable to hackers. Anything that has internet connectivity can be vulnerable. Smart TVs, game consoles, TV set boxes (like Roku and Apple TV), thermostats, security systems, baby monitors, and more.
	Check new purchases. More and more appliances are being loaded with computer technology. Some of these devices do not have security protection in them, others have factory settings that most of us do not change. Know what you are buying before you buy.
	Reset the passwords. When installing a new smart device, immediately change the password. If professionally installed, change the password from the one set by the installation company.
	Periodically change your passwords. Create a system to update and change all your passwords on a regular basis. This can create havoc as remembering this changing password landscape can be a real burden. So develop a system that is easy for you to remember but virtually impossible for a cyber thief.

Tick Tock. Tax Reduction Ideas Still Available

As the end of the year approaches, there is still time to make moves to manage your tax liability. Here are some ideas to consider.
Maximize your retirement plan contributions. This includes traditional IRAs, Roth IRAs, and SEP IRAs for self-employed. Given the contribution limits in 2017 are not increasing, now is the time to maximize the contribution potential for this year and plan for next year's contributions. Estimate your current and next year taxable income. With this estimate you can determine which year receives the greatest benefit from a reduction in income. By understanding what the tax rate will be for your next dollar earned, you can understand the tax benefit of reducing income in this year versus next year.
Make charitable contributions. Consider which tax year will benefit most from your charitable giving of cash and non-cash items. Shift your giving into the year that will provide you the most benefit. Take capital losses. Each year you can net capital losses against capital gains. You can also deduct up to $3,000 in excess losses against your other income. Start to identify which investments may make sense to sell to take advantage of this. If planned correctly, these losses can offset ordinary income. Consider donating appreciated stock. This strategy gives you a charitable deduction for the market value of the stock, while not having to pay capital gains tax on the charitable gift. If you provide an annual pledge sheet to your church, this can be a great way to maximize your gift while giving needed funds to your church at the beginning of the year. Standard or itemized deductions. The standard deduction for 2016 is $12,600 for joint filers and $6,300 for single filers. If your itemized deductions are close to these amounts, consider shifting the deductions into next year. You can then maximize the benefit of itemizing into one tax year. Retirement plan distributions. If you are age 70½ or older, take your required minimum distributions for the year. If you are retired, but younger than 70½, consider taking tax efficient distributions from your retirement accounts. By paying some tax now, you may avoid paying higher taxes later when you have to follow the minimum distribution rules. Consider tax legislation. Please recall that tax laws passed in late 2015 made many temporary tax savings permanent and extended others into 2016. So save classroom related receipts if you are a teacher. Consider charitable contributions from your retirement plan if you are a senior. Keep receipts of large purchases to track a potential sales tax deduction.

As always, should you have any questions or concerns regarding your situation please feel free to call.