Important Information for Tax Season 2021

Contributed by: Lauren Adams, CFA®, CFP®

As we prepare for tax season, we want to keep you apprised of when you can expect to receive your tax documentation from Raymond James.

2021 Form 1099 mailing schedule

• January 31 – Mailing of Form 1099-Q and Retirement Tax Packages

• February 15 – Mailing of original Form 1099s

• February 28 – Begin mailing delayed and amended Form 1099s

• March 15 – Final mailing of any remaining delayed original Form 1099s

Additional important information

Delayed Form 1099s

In an effort to capture delayed data on original Form 1099s, the IRS allows custodians (including Raymond James) to extend the mailing date until March 15, 2022, for clients who hold particular investments or who have had specific taxable events occur. Examples of delayed information include:

• Income reallocation related to mutual funds, real estate investment, unit investment, grantor and royalty trusts, as well as holding company depositary receipts.

• Processing of original issue discount and mortgage-backed bonds.

• Expected cost basis adjustments including, but not limited to, accounts holding certain types of fixed income securities and options.

If you do have a delayed Form 1099, we may be able to generate a preliminary statement for you for informational purposes only, as the form is subject to change.

Amended Form 1099s

Even after delaying your Form 1099, please be aware that adjustments to your Form 1099 are still possible. Raymond James is required by the IRS to produce an amended Form 1099 if notice of such an adjustment is received after the original Form 1099 has been produced. There is no cutoff or deadline for amended Form 1099 statements. The following are some examples of reasons for amended Form 1099s:

• Income reallocation

• Adjustments to cost basis (due to the Economic Stabilization Act of 2008)

• Changes made by mutual fund companies related to foreign withholding

• Tax-exempt payments subject to alternative minimum tax

• Any portion of distributions derived from U.S. Treasury obligations

What can you do?

You should consider talking to your tax professional about whether it makes sense to file an extension with the IRS to give you additional time to file your tax return, particularly if you held any of the aforementioned securities during 2021.

If you receive an amended Form 1099 after you have already filed your tax return, you should consult with your tax professional about the requirements to re-file based on your individual tax circumstances.

You can find additional information here.

Special note for IRAs in 2021

Raymond James Trust Company of New Hampshire (RJTCNH) succeeded Raymond James & Associates, Inc. (RJA) as custodian of IRAs, effective September 7, 2021. Accounts that had reportable activity before and after the Raymond James custodianship change will be receiving two 2021 tax packages. The second package is not a duplicate of the first package.

• The first package contains reportable activity occurring from January 1, 2021 – September 3, 2021 under the RJA custodianship.

• The second package will contain reportable activity occurring from September 7, 2021 – December 31, 2021 under the RJTCNH custodianship.

Both tax packages contain a summary of assets page detailing the total of each asset at year-end. However, the total value of these assets will only appear on the RJTCNH package as it reflects the Fair Market Value that will be reported by NJTCNH to the IRS for your account. Please do not assume the second package is a duplicate of this package. The contribution and/or distribution summaries will be different as well as Forms 1099-R and/or 5498. All forms must be used when completing the 2021 tax return.

And don’t forget…

As you complete your taxes for this year, a copy of your tax return is one of the most powerful financial planning information tools we have. Whenever possible, we request that you send a copy of your return to your financial planner, associate financial planner, or client service associate upon filing. Thank you for your assistance in providing this information, which enhances our services to you.

We hope you find this additional information helpful. Please call us if you have any questions or concerns about the upcoming tax season.

Lauren Adams, CFA®, CFP®, is a Partner, CERTIFIED FINANCIAL PLANNER™ professional, and Director of Operations at Center for Financial Planning, Inc.® She works with clients and their families to achieve their financial planning goals.

Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.

Tips to Help You Achieve Your Financial Goals

Contributed by: Kelsey Arvai, MBA

We hope your 2022 is off to a great start! As we all know, the New Year is an opportune time to reset and reevaluate your goals. With this in mind, we have come up with some simple yet effective strategies to position yourself for a prosperous year ahead.

Automate Savings and Debt Reduction

Establishing and maintaining a positive cash flow is a top-tier priority for your financial health. Automation is key to being efficient and effective while working toward your financial goals. Prioritizing your savings contribution through automation helps hedge against the temptation to spend the funds elsewhere. Additionally, utilizing automatic payments for your credit card could help your credit score if the time the payment happens is before your due date. After establishing an emergency fund through your automated savings, you might consider directing excess cash to your retirement and health savings plans.

Max Out Your 401(k) and Health Savings Account (HSA)

The beginning of the year is a great time to review your 401(k) and HSA contributions. In doing so, you can ensure that you are maximizing your benefits and taking advantage of increased deferral limits for 2022. 401(k), 403(b), and most 457 plan contribution limits have been bumped up to $20,500 for elective employee deferral.

HSA contribution limits have also been increased to a maximum of $3,650 for individuals and $7,300 for family coverage. It is estimated that couples retiring today will face $200,000-$300,000 of out-of-pocket medical expenses over the course of their retirement years. HSA balances can build and grow over time, and these accounts can be used to offset healthcare costs in retirement.

Plan for Charitable Giving

The beginning of the year is also a great time to determine your charitable goals and budget for the year ahead. We have written extensively on how to best pick a charity, so if you are unsure of which causes or organizations you would like to support, these blogs may be helpful!

How to Pick a Charity…During a Pandemic Part 1: Important Documents

How to Pick a Charity…During a Pandemic Part 2: Commitment to the Mission

How to Pick a Charity…During a Pandemic Part 3: Resources

Invest in Your Emotional and Physical Well-Being

As you take stock of your financial health this year, carving out time for your physical health is equally paramount. There is a connection between health and wealth, and each should be reviewed by a professional, at least annually.

Reach Out to Your Financial Advisor 

Working with your advisor on an ongoing basis can provide you support to keep you on track while you are determining and working towards financial goals. If you ever have any questions, please reach out to us. We are always happy to help!

Kelsey Arvai, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Kelsey Arvai, MBA and not necessarily those of Raymond James.

2021 Fourth Quarter Investment Commentary

Contributed by: Center Investment Department

As we close the books on 2021 and move into 2022, we took a few minutes to re-read our thoughts as we started the year. There was a sense of hope that the recovery would continue, jobs would recover, and the world would start to normalize. There was also worry over finalizing the election and concerns of tax rate increases. While it has been a bumpy road, the year has ended better than where we began in some very important aspects like job recovery and dodging the bullet of widely higher taxes. We do have a fresh batch of worries but also optimism looking ahead to 2022.

A diversified benchmark portfolio consisting of 60% stocks (split 40/20 between U.S.-S&P 500 and International-MSCI EAFE) and 40% bonds (Bloomberg Barclays U.S. Aggregate Bond Index) is up just over 12.5% for 2021, with the S&P 500 again leading the way at +28.71%, international stocks (MSCI EAFE) at +11.78%, and U.S. Aggregate Bonds at -1.54%. Please keep in mind indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns.

The good news is, for yet another year, the above hypothetical diversified portfolio would be up well over any targets we may have designed with you toward meeting financial planning goals; which should be an investor’s ultimate long term target.

Should we continue to diversify your portfolio?

Investors everywhere have been left wondering, “Why don’t I just own more U.S. stocks if they are producing such stellar returns this year while everything else (bonds or emerging) has produced very ho hum to negative results?” During these times, it is important to open our history books and remember the “lost decade.” 

We are referring to the 10 year time period throughout the 2000’s when the S&P 500 produced a negative total return. This was a very difficult time period starting with the burst of the dot-com bubble and ending with the financial crisis of 2008. Many felt like there was nowhere to hide during this time period. In reality however, those with a widely diversified portfolio had quite the opposite results. Sure a portion of their portfolio was flat to down but many of the other areas of their portfolio performed quite well over this decade, boosting their overall portfolio returns. The chart below illustrates average annual returns from some of the major Morningstar categories from 2000-2009.  The lost decade only applied to one type of investment one could own.

Chart and data courtesy John Hancock® Investments

The Center has a long history, being founded in 1985, so we have the benefit of guiding clients through many types of return environments. Coming into this lost decade, investors were asking us the very same questions we are hearing now, and the chart above shows us how that ended. While we don’t believe we are on the doorstep of another lost decade, we do feel it is not the time to abandon diversification. So, when you open your statements this year, you may see other well-known strategies that are roughly 60% Stock/40% bond up even less at just below 10% for the year. So, be careful before making any drastic changes to your portfolio. Talk to your financial planner first to determine how this might impact your long term goals!

What about Inflation?

People are saving less and spending more. Prior to the pandemic the savings rate, according to the Bureau of Economic Analysis, was roughly 7.5%, spiked up to almost 34% at the start of the pandemic in April 2020, and is now back down to 7.5%. With that large savings round trip, however, cash in bank accounts is still very high. Roughly $3.3 trillion of extra cash has accumulated in bank accounts by Americans (source: Longview Economics). All of this extra cash has served as fuel for inflation. As of the end of November, inflation readings hit a 40 year high of 6.8%. Food and energy were the main drivers of these readings. As stimulus slows, we should see spending (demand) in both of these areas level off and even decline a bit.

The Federal Reserve is now taking active measures to try to combat inflation. If you look at the history of interest rates, we have been very low for a long time. The Federal Reserve under chairs, Yellen and Powell, started to creep them back upwards as we emerged from the financial crisis. Then the pandemic struck and The Fed took them right back down near zero. Now the forecast is to start increasing rates again.

The last time we saw inflation at the levels we are at now was back in the early 1980’s. At that time, interest rates were quite high to try to bring inflation down. Sometimes we get the question of why increasing interest rates help to combat inflation. We love this question because it brings us back to the basics of economics!

Inflation is a result of too much money chasing too few goods. Right now, we have both scenarios of this equation playing out. Too much money (remember the paragraph above where we reference how much money households are holding?) chasing too few goods caused by supply chain disruptions. The basic recipe for inflation is in place. You also compound this by the base of comparison; inflation was next to nothing in 2020, teetering on the verge of deflation because no one was spending money. This is called demand-pull inflation for you economics nerds out there. There is also cost-push inflation happening and wages rising for lower income households. This also increases the price of goods and services (higher costs pushing prices higher).

So if low interest rates (cheap borrowing) and government stimulus has put money into our hands to spend and cause inflation, higher interest rates (more expensive borrowing) and no more government handouts should start to take money out of our hands for spending and therefore slowing the rate we buy things. With less demand comes lower prices or at least prices that rise at a slower pace. This is a long and slow process though. These moves by the Federal Reserve do not accomplish the task overnight. Higher interest rates take months to years to filter their way into the economy and slow inflation. Other forces may be present to help curb inflation in the new year as well. Our basis of comparison is going to rise steadily throughout 2022 and supply chain disruptions should start to ease.

Stocks are expensive.  Is now a bad time to buy?

Stocks were expensive at the start of last year too, but if you avoided the S&P 500 last year then you missed out on over 28% of returns. Valuations are not everything when it comes to stock returns, and trying to time the market rarely works in investors’ favor. We are not market timers, but we do monitor the yield curve, leading economic indicators, and various commentary resources for determining our outlook for equities and bonds. Right now, our signals are still saying neutral stocks to bonds. Our research has also found that forward market performance is not correlated highly with P/E ratios.

The below chart shows how uncorrelated valuations are as a short term indicator. Sometimes, with this reading as of November 30th, the market has been up 20-40% (gray dots above the orange line in the left hand chart) one year out and sometimes it has been down 20-30% (gray dots below the orange line in the left hand chart).  Five year forward returns were all positive and in most cases positive by more than 5-6%.

International valuations are the opposite story and have been for a long time too, yet they continue to underperform.  We continue to hold them as part of the allocation because of the compelling valuation story and importance of diversification. This chart is interesting because it shows how long you can be wrong making an investment call purely on valuation. The ACWI ex-US looked like a good deal versus the U.S. 10 years ago and we know how that story has ended.

The final thing we would like you to remember if you find yourself asking “is now a bad time to buy?” is that if your portfolio is diversified, then large U.S. stocks will only make up a portion of your portfolio. In a diversified 60/40 portfolio for instance, S&P 500 stocks might only make up ¼ of your total portfolio. The other asset classes should provide different return streams or even buffer the portfolio in the event of a U.S. stock market decline. Stick to your plan, rebalance according to it, and avoid making all-in or all-out decisions that could impair your financial future.

Looking forward to 2022

We should start to see interest rates increase and, therefore, we are favoring shorter duration bonds in portfolios for now. We want to continue to let your bonds be bonds and your stocks be stocks. Bonds continue to be an important portion of your portfolio to serve as a volatility dampener while we leave our equities free to generate returns needed to achieve your financial planning goals.

The CDC is relaxing quarantine guidelines as more and more information becomes known about transmutability of the virus. This should serve to start relaxing supply chain disruptions caused by virus spikes hopefully alleviating the transitory portion of inflation. Part of the reason the U.S. performed so strongly in 2021 was a continuation of the re-opening story. We resisted further economic shutdowns despite new waves of Covid outbreaks. Overseas was a different story as outbreaks brought continued sporadic shutdowns. As immunities build and the virus continues to (hopefully) evolve into weaker strains, we should see less of this supporting stronger rallies with overseas markets.

If you are interested in hearing more about our forward-looking views, join us in February for our Economic and Investment Outlook Event. Stay tuned for details in the upcoming weeks.

Remember, we are here to help you meet your investment goals, so feel free to reach out to the investment team or your planner anytime for support. On behalf of the entire Center Team, we wish you a wonderful 2022.

Any opinions are those of the author and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Dividends are not guaranteed and must be authorized by the company's board of directors. Special Purpose Acquisition Companies may not be suitable for all investors. Investors should be familiar with the unique characteristics, risks and return potential of SPACs, including the risk that the acquisition may not occur or that the customer's investment may decline in value even if the acquisition is completed. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not a guarantee or a predictor of future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Five Important Financial Questions to Ask Yourself Going into 2022

Contributed by: Sandra Adams, CFP®

Once again, a new year is upon us. Rather than start the year with financial New Year’s Resolutions that we are doubtful to keep, why not simply start by asking ourselves some important financial questions, answering them honestly, and taking some action steps in response? Here are the five questions we recommend asking to get your year started on the right foot:

1. What are the top financial goals you want to accomplish in 2022 (and do they align with what you value most)? 

Prioritizing what you want to accomplish and ensuring it is in line with what you value most is the first key to financial success. Once you have set your goals, you can put into motion just how to get there.

2. How can I accomplish my financial goals and save more? 

Most likely, many of your financial goals involve having money saved to meet them. Whether it be a large family vacation, paying off a mortgage, or making a certain amount of progress towards a significant life goal like retirement, most goals involve accumulating money. The beginning of the year is an excellent time to determine your financial budget and set aside funds for these goals. Make sure to keep in mind the new retirement plan contribution limits for 2022 and budget savings outside of retirement accounts for short-term goals and debt payoffs.

3. Does my investment strategy match my goals?  

The beginning of the year is always a good time to review your Investment Policy Statement. In return, you can determine if your investment strategy is still in line with your short and long-term financial goals and make sure that you are not taking too much or too little of a risk for the goals you have in mind for YOUR specific plan.

4. Am I financially protecting my loved ones? 

It makes sense to continually review your plan to ensure that your goal is solid from a risk perspective. Each year, you should review all of your insurance protections, including life insurance, disability insurance, liability insurance (home and auto), and possible long-term care insurance, to ensure that your family is fully protected.

5. Am I being financially safe/smart around potential financial credit and fraud risks? 

With electronic and internet transactions posing threats to our financial safety, it is important to be aware of precautions to take when transacting business electronically, having credit and fraud monitoring services in place, and proactively monitoring your credit report regularly. If you don’t have a credit and/or fraud monitoring service, you should likely have something in place (ask your advisor for recommended services).

Asking these quick questions and taking the action steps to answer them will get you on the right footing to a successful 2022. For assistance with any of these items, reach out to your financial advisor — we are always willing to help!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Sandra D. Adams, CFP® and not necessarily those of Raymond James.

How to Pick a Charity…During a Pandemic Part 3: Resources

While vetting a charity can be challenging in any environment, vetting a charity without interacting in person can be especially challenging. In this three-part blog series, I hope to share a few tips to help you pick and support amazing charities from the comfort of your home. 

Participate in The Center's Annual Toys for Tots Drive! Donate by December 17th.

Learn how The Center gives back throughout the year. 

Contributed by: Jaclyn Jackson, CAP®

Last time, we learned how to determine whether a nonprofit stuck to its mission with program indicators. However, what if you are pressed for time or lack the CPA relationships to help you through financial analysis? Well, you're in luck because there is help readily available at your fingertips, and I am going to show you where to look online. 

Helpful Vetting Resources

• GuideStar provides information on a charity's income, spending, mission, and executive salaries. They hold records for 1.8 million nonprofits registered with the Internal Revenue Service. Free parts of the website provide access to each organization's Form 990, the primary IRS filing document for nonprofits. Premium services offer more financial analysis.

• BBB Wise Giving Alliance produces reports about national charities, evaluating them against comprehensive Standards for Charity Accountability, and publishes a magazine, the Wise Giving Guide, three times a year.

• Charity Navigator applies analysis to each of its charities to come up with its star ratings (with four stars as the highest rank). The site focuses on financial health, accountability, and transparency.

• Charity Watch rates 600 charities with a grading system from A to F — and takes a watchdog approach towards exposing nonprofit abuses.

Pro Tip: If you decide to use a vetting site of your choice, look for sites that don't charge charities to be reviewed. his helps mitigate biased evaluation from vetting sites.

You made it to the end of the series! Hopefully, you feel empowered to choose an incredible nonprofit to support this year and that you had just as much fun reading the series as I had writing it. If you are interested in adding philanthropy to your financial plan, we have strategies to share with you. Feel free to email your Center planner with questions or contact@centerfinplan.com if you are new to The Center (we welcome you!).

Reminder: If you plan on donating this year, don't forget tax-advantaged opportunities extended to donors through the CARES Act:

• In addition to the standard deduction, non-itemizers can take an above-the-line deduction for $300 of charitable contributions per person. Joint filers can deduct up to $600. Additionally, itemizers can now deduct donations up to 100% of their AGI.

Are you working on your year-end tax planning? Check this out! Have questions? Don't hesitate to reach out: contact@centerfinplan.com.

Make sure to check out part one of this blog series here, and part two of this blog series here!

Jaclyn Jackson, CAP® is a Portfolio Manager at Center for Financial Planning, Inc.® She manages client portfolios and performs investment research.

Opinions expressed are not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Past performance is not a guarantee of future results. Investing involves risk and investors may incur a profit or a loss. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

How to Pick a Charity…During a Pandemic Part 2: Commitment to the Mission

While vetting a charity can be challenging in any environment, vetting a charity without interacting in person can be especially challenging. In this three-part blog series, I hope to share a few tips to help you pick and support amazing charities from the comfort of your home. 

Participate in The Center's Annual Toys for Tots Drive! Donate by December 17th.

Learn how The Center gives back throughout the year. 

Contributed by: Jaclyn Jackson, CAP®

In part one of our "How to Pick a Charity...During a Pandemic" blog series, we discussed key documents to help identify a great nonprofit. In part two of our series, I'll show you how to determine whether money donated to nonprofits goes towards their programs & initiatives. 

On A Mission 

We understand a nonprofit is on a mission when they dedicate the majority of their resources toward implementing the programs that support the communities they aim to serve. While we generally assume the best of charities, sometimes a tiny voice in our minds ponders if our contribution actually helps people in need. Do our donations really support service programs? If you've ever heard that small voice, this number (with the help of your Certified Public Accountant, or CPA), can give you insight about a nonprofit's program spending habits:

The Program Expense Percentage, also known as The Program Efficiency Ratio, divides the organization's program expenses by the organization's total expenses. (Your CPA can use the charity's Form 990 to calculate this percentage.) 

While the program expense percentage varies by service provided and operating expenses needed to provide the service, experts recommend the percentage be at least 65%. In other words, 65% or more of the charity's resources (as evaluated by expenses) should be used for programming. If you can find two to three years of 990 forms for a nonprofit, you can determine spending trends. Charities that consistently underspend on their programs and services do not have as strong an impact on their charitable missions. 

Before we chop off any heads, it is also important to understand the nonprofit's program "stage".  For example, if the program is new or is trying to expand, more than ordinary operational expenses (staff hires, technology, etc.) may be required to catapult programming. Having data is great, but pairing data with accurate analysis is better.  Talk to the nonprofit about discrepancies, so your analysis is accurate.

Pro Tip: Pay attention to whether the charity practices "joint cost allocation". Joint cost allocation lumps fundraising with the charity's program expenses. This tactic blurs the line between resources spent on solicitation and service programs. If you bump into this practice, get clear about the type of charity you want to support. It may be appropriate for lobbying or public awareness organizations to use joint cost allocation, but you may not be able to deduct your donation to those types of organizations. On the other hand, joint cost allocation may be a red flag for service-based nonprofits.

Phone a Friend

I want to emphasize, rely on your support team to do the math for you. A CPA can help you crunch numbers as well as compare 990s to annual reports and financial statements. This is especially helpful if any of the documents are vague or missing information. If you need your gifting efforts to consider your tax or estate planning needs, ask your financial planner (that is why we are here!) for help.

Reminder: If you plan on donating this year, don't forget tax-advantaged opportunities extended to donors through the CARES Act:

• In addition to the standard deduction, non-itemizers can take an above-the-line deduction for $300 of charitable contributions per person. Joint filers can deduct up to $600. Additionally, itemizers can now deduct donations up to 100% of their AGI.

Are you working on your year-end tax planning? Check this out! Have questions? Don't hesitate to reach out: contact@centerfinplan.com.

Make sure to check out part one of this blog series here!

Jaclyn Jackson, CAP® is a Portfolio Manager at Center for Financial Planning, Inc.® She manages client portfolios and performs investment research.

Opinions expressed are not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Past performance is not a guarantee of future results. Investing involves risk and investors may incur a profit or a loss. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

How to Pick a Charity…During a Pandemic Part 1: Important Documents

While vetting a charity can be challenging in any environment, vetting a charity without interacting in person can be especially challenging. In this three-part blog series, I hope to share a few tips to help you pick and support amazing charities from the comfort of your home. 

Participate in The Center's Annual Toys for Tots Drive! Donate by December 17th.

Learn how The Center gives back throughout the year. 

Contributed by: Jaclyn Jackson, CAP®

Answering the Call 

According to a study done by the Urban Institute, nonprofits need our support more than ever. The study revealed 4 in 10 small charities experienced a dip in donations amid pandemic and economic concerns. Likewise, 29% of large nonprofits faced the same fate. The timing couldn't be worse as the demand for services provided by nonprofits has increased.

Luckily for nonprofits, the gifting season is here, and people across the nation open their hearts and pockets to wonderful nonprofits. Chances are, if you're reading this blog series, you're probably one of those soft-hearted individuals.

Let the Vetting Process Begin: Important Documents

You want to give wisely, and I want to support your efforts. Let's get started! In part one of this series, I'll outline the documents you'll need to assess a nonprofit. These documents are usually available on a nonprofit's website. However, you may have to do a little digging. Utilize navigation menus commonly found at the bottom of website homepages; go to the "about" page to find leads; use site search fields to search for reports by name.

1. Form 1023 - Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code: This tells you the organization is, in fact, a 501(c)(3) nonprofit. Aside from religious institutions (which have a different tax identification code), individuals most commonly support 501 (c)(3)s charities. Sometimes, nonprofits will provide their Employer Identification Number (EIN) instead of this form. You can use the number to confirm 501(c)(3) status on the IRS website.

2. Annual Report: Use this holy grail document to gain a comprehensive view of the nonprofit you're considering. Annual reports generally contain a charity's mission statement and focus, projects initiated (fundraising events, volunteer efforts, community programs), financial information, potential donors, and an account of significant contributions.

3. Form 990 - Return of Organization Exempt From Income Tax Form: Similar to how individuals tell the IRS about their financial activity, Form 990 provides the government and the public with a snapshot of the charity's activities for that year.

Bonus Documents

If you're thinking about giving a larger-than-normal contribution or becoming a long-term donor, inquire about the following policy documents. These items are not always on websites, so you may need to make an email request or call the nonprofit. 

• Code of Ethics or a Statement of Values: Company guidelines to help employees, volunteers, and board members make ethical choices and create accountability for those choices.

• Whistleblower Protection Policies: This shows a charity is open to hearing concerns or complaints about its practices by demonstrating that it values transparency and accountability practices.

• Governance Policies for nonprofit boards, internal controls, and conflict of interest policies help to ensure ethical leadership practices.

We've covered key documents to help you pick a great nonprofit. In part two of our series, I'll show you how to determine whether money donated to nonprofits actually goes towards programs & initiatives. 

Reminder: If you plan on donating this year, don't forget tax-advantaged opportunities extended to donors through the CARES Act:

• In addition to the standard deduction, non-itemizers can take an above-the-line deduction for $300 of charitable contributions per person. Joint filers can deduct up to $600. Additionally, itemizers can now deduct donations up to 100% of their AGI.

Are you working on your year-end tax planning? Check this out! Have questions? Don't hesitate to reach out: contact@centerfinplan.com.

Jaclyn Jackson, CAP® is a Portfolio Manager at Center for Financial Planning, Inc.® She manages client portfolios and performs investment research.

Opinions expressed are not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Past performance is not a guarantee of future results. Investing involves risk and investors may incur a profit or a loss. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Sandy Adams and Matt Chope's Center-versary

Click on the image above to view a video of Sandy and Matt!

Contributed by: Center for Financial Planning, Inc.®

This year marks 25 years that both Sandy Adams, CFP® and Matt Chope, CFP® have been at The Center. Over those years, they've made a tremendous impact on our clients, our team members, and the firm itself.

Sandy Adams specializes in Elder Care Financial Planning and works with generations of families including older adults, their children, and grandchildren. She also works with those going through stressful life transitions such as the death of a spouse, divorce, or job loss.

Sandy is a frequent speaker at conferences, actively volunteers with local nonprofits, and regularly contributes to various blogs, journals, and publications. She has also been nationally recognized by Forbes as a Top Woman Wealth Advisor in both 2021 and 2020.

Matt Chope helps individuals and families with financial planning, in addition to working with local corporations and non-profits on business management decisions. With his interests in economics and financial markets, Matt is also a valued member of the firm's investment committee.

Matt has earned a place on Forbes’ Best-In-State Wealth Advisors List in Michigan for 2021 for the third year in a row. He is a member of multiple public and professional groups, is a trusted source for investment-related publications, and oversees and manages several local endowments.

We couldn't be happier to recognize and celebrate such a huge milestone for Sandy and Matt. Congratulations to the both of you!

The Forbes ranking of America's Top 1,000 Women Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative and quantitative data, rating thousands of wealth advisors with a minimum of 7 years of experience and weighing factors like revenue trends, AUM, compliance records, industry experience and best practices learned through telephone and in-person interviews. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Research Summary (as of February 2021): 32,810 nominations were received based on thresholds (9,785 women) and 1,000 won; (as of April 2020): 32,000 nominations were received based on thresholds (9,654 women) and 1,000 won. This ranking is not indicative of advisor's future performance, is not an endorsement, and may not be representative of individual clients' experience. Neither Forbes nor SHOOK receive a fee in exchange for rankings. Raymond James is not affiliated with Forbes or Shook Research, LLC. Please visit https://www.forbes.com/top-women-advisors for more information.

The Forbes ranking of Best-In-State Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone and in-person due diligence interviews, and quantitative data. Those advisors that are considered have a minimum of seven years of experience, and the algorithm weights factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices in their practices and approach to working with clients. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Out of approximately 32,725 nominations, more than 5,000 advisors received the award. This ranking is not indicative of an advisor's future performance, is not an endorsement, and may not be representative of individual clients' experience. Neither Raymond James nor any of its Financial Advisors or RIA firms pay a fee in exchange for this award/rating. Raymond James is not affiliated with Forbes or Shook Research, LLC. Please visit https://www.forbes.com/best-in-state-wealth-advisors for more info.

2020: 32,000 nominations with more than 4,000 advisors received the award.

2019: 29,334 nominations received and 3,477 received the award.

Survival Tips for Caregivers

Contributed by: Sandra Adams, CFP®

It’s no surprise that our population is aging at a rapid pace. Currently, more than 46 million older adults, age 65 and above, live in the U.S.; and this number is expected to grow to more than 90 million by 2050! In any given year, there are more than 50 million people providing care in the U.S., many of whom claim they did not have a choice in taking on their caregiving responsibilities.

I had the privilege of attending the annual Alzheimer’s Association-Michigan Chapter/Wayne State University Institute of Gerontology – A Meaningful Life with Alzheimer’s Conference recently. Much of the conference focused on how to make sure that caregivers are being taken care of, so they can then provide the best care to others. Many caregivers are so focused on those they are caring for that they’ll skip their own doctor appointments (54%) or miss work (65%), which puts them in potential medical and financial harm, as well as risk for caregiver burnout for the sake of focusing on the person they are caring for.

Action Steps to Help Caregivers Survive Burnout:

1. Acknowledge that you matter — take time for yourself!

2. Make a plan for your mind, body, and soul — take time to rest your mind, exercise your body, and feed your soul!

3. Don’t sweat the small stuff — don’t worry about things you cannot control!

4. Stay socially active — take time to do things with family and friends that are not in a caregiving capacity.

5. Find someone to talk to about your frustrations — whether it’s a friend, a caregiver support group, or a therapist.

As a caregiver, you can be overwhelmed with so many responsibilities. You may have a family of your own and care for older adult parents, or you may be caring for a spouse while holding down a job or other responsibilities. Whatever your caregiving role, it is never easy. It is important to remember that you are not in it alone; there are others to rely on and delegate to, whether in health care, financial, legal, or other roles. And it is most important to take care of yourself. It takes a happy, healthy caregiver to take care of others in the best way possible. If you or anyone you know is serving as a caregiver and are in need of support, please reach out. We are always happy to help.

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Retirement Plan Contribution and Eligibility Limits for 2022

Contributed by: Kelsey Arvai, MBA

Contributed by: Robert Ingram, CFP®

The IRS has released its updated figures for retirement account contribution and income eligibility limits. Here are the adjustments for 2022:

Employer retirement plan contribution limits including 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan:

• Employee elective deferral contribution limit is increased to $20,500 (up from $19,500).

• IRA catch-up contribution limit for individuals over 50 remains unchanged at $1,000.

• The total amount that can be contributed to a defined contribution plan including all contribution types (e.g., employee deferrals, employer matching, and profit-sharing) is $61,000 or $67,500 if over the age of 50 (increased from $58,000 or $64,500 for age 50+ in 2021).

􀁸 Traditional, Roth, SIMPLE, and SEP IRA contribution limits:

• Individuals can contribute $14,000 to their SIMPLE retirement accounts (up from $13,500).

• SIMPLE IRA catch-up contributions for individuals over 50 is $3,000.

• Limit on annual IRA contributions remains unchanged at $6,000.

• IRA catch-up contribution limit for individuals over 50 remains unchanged at $1,000.

The income ranges for determining eligibility to make deductible contributions to Traditional IRAs and contributions to Roth IRAs increased for 2022.

Traditional IRA deductibility income limits:

• For single taxpayers covered by a workplace retirement plan, the phase-out range increased to $68,000 to $78,000 (up from $66,000 to $76,000).

• Married filing jointly taxpayers:

  • If the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range increased to $109,000 to $129,000 (up from $105,000 to $125,000).

  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range increased to $204,000 to $214,000 (up from $198,000 to $208,000).

• For married filing separately taxpayers who are covered by a workplace retirement plan, the phase-out range remains the same, $0 to $10,000.

Roth IRA contribution income limits:

• For single taxpayers and Head of Household, the income phase-out range is increased to $129,000 to $144,000 (up from $125,000 to $140,000).

• For married filing jointly, the income phase-out range is increased to $204,000 to $214,000 (up from $198,000 to $208,000).

• For married filing separately, the income phase-out range remains unchanged at $0 to $10,000.

One strategy that has been used to accumulate dollars in a Roth IRA, even if your income level prohibits you from making regular contributions, is to accumulate non-deductible Traditional IRA contributions and then use Roth IRA conversions to move funds to the Roth IRA. This is known as the so-called “backdoor Roth IRA.” For individuals with an employer retirement savings plan, like a 401k or 403(b), that allows after-tax contributions in addition to the typical pre-tax or Roth contributions, there may be an opportunity to convert those after-tax contributions to a Roth IRA as well.

We continue to follow the proposed Build Back Better legislation going through Congress, and it’s probably not a big surprise that this continues, and will continue, to evolve. It still may be too early to tell, but it’s possible that these types of “back-door Roth IRA” strategies will go away starting in 2022.

These strategies would no longer be allowed under the proposed tax law changes in the Build Back Better plan. This year may be your last chance to use these strategies, so keep them on your radar. You can check out our blogs on “Back-Door Roth IRA” HERE and on the “Build Back Better plan” HERE.

Health Savings Account (HSA) contribution limits for 2022:

• For those with an individual high deductible health plan, HSA annual deductible contribution limit is $3,650.

• For those with a family HDHP, HSA annual deductible contribution limit is $7,300.

With increased retirement savings opportunities in 2022, we encourage you to keep these figures in mind when reviewing and updating your financial plan. If you have any questions, please feel free to reach out; we love to help! We hope you have a happy and healthy holiday season!

Kelsey Arvai, MBA, is a Client Service Associate at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.