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Redrick Terry: It is time now for 4 Your Money. We’re joined as always by David Nelson, CEO of Nelson Corp Wealth Management. David, welcome back.
David Nelson: Redrick, thank you.
Redrick Terry: Absolutely. We are talking taxes once again this week and now that tax season is starting to wind down for the year, what should people be thinking about in terms of saving on taxes in the future?
David Nelson: This is what’s exciting. Again, we like to have these conversations with people today focusing on what we can do as far as looking forward versus looking in the rear view mirror. So as far as going forward, again, we, we, we spend a lot of time talking about retirement plans, as far as with folks, because again, i-, it’s a situation most people don’t have enough money when they want to retire.
So we wanna encourage today, putting away a few dollars, as far as in there. That’s 401k plans. That’s simple retirement plans. That, that’s KEO plans. That’s SEPS uh, uh plans, Simplified Employee Pension Plans. It’s a lot of different, and it, it’s a[inaudible]. So there’s a lot of different vehicles that people should be looking at. That’s also HSAs. Many people today are eligible for HSAs, which is a health savings account. And this health savings account, depending on the, the type of plan that you have as far as your health insurance is concerned, you may be eligible. Health savings accounts allow you to put money in there. Get deductions today as far as on your tax return and take that money out over a life time, as far as tax free, to help defer as far as some of your healthcare costs. Wonderful vehicles that people should be looking at.
The last one that I wanna touch on is charitable planning. Charitable planning for most individuals, they don’t really give it any thought. They, we, we’ve been conditioned in years past to, to give money away as far as to charity, it was totally deductible. It was easy, it was simple back then. Today, it’s not because today we have these thresholds that people have to go through in order to make this a deductible expense. And so we encourage people to do is if you consistently give money to charity, have a discussion with somebody that’s qualified in this area that can help show you how to make those, those, uh, contributions that you make to charity deductible as far as so that it adds real value on your tax return.
Redrick Terry: Certainly. And, and you mentioned it, you know, most people would consider back then, uh donating like that to be a good thing because it lowers their taxes.
David Nelson: Right.
Redrick Terry: Could you go a little bit deeper into explaining what you mean by that?
David Nelson: Yeah. So, so the, the, the, the heavy lifting comes into play as far as that, that individuals, when I give away a dollar today as far as to a charity, the charity gets the benefit of that. And in the past I used to get that full benefit of that dollar in my tax return. Now you have a threshold so much that you have to go through as far as the deductions under this number won’t be deductible and every situation’s a little different. So we try to do is we try to lump them together, we call it bunching. And so if you’re going to consistently give money to charity, bunch them up, make it in one year where it brings some value to the table as far as deductions and then the following year she’ll just distribute the money as far as to the charities as far as through a vehicle, there’s a, there is a vehicle called a donor advise fund that’s a wonderful vehicle that can help many of our listeners out there and uh, and viewers out there as far as to understand some benefits and how to give money away to charity more tax efficiently.
Redrick Terry: Certainly we’re running out of time, but can people … You talk about knowing the future.
David Nelson: Yes.
Redrick Terry: Uh, can people really know their texts situation uh, the way it’s currently changing and constantly changing? Can people still know that, the future?
David Nelson: I-, It’s, w-, we can make a good guess and I, I believe that gas basically centers around that individuals should be looking at, again, not just a one year type decision, but at least a three, four, five year type decision. What makes the most sense for me, and again, what we can do is we can help individuals in that area as far as to think through, not just the immediate sugar highs we talk about all the time, but the longterm benefits that are going to come from it.
Redrick Terry: Very, very important. David, as always we thank you for joining us.
David Nelson: Thank you Redrick, I appreciate it.
Redrick Terry: Absolutely. And if you listen to any of our discussion, we’ll have it for you on our website, OurQuadCities.com.
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