Client Update
May 2025

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May 11

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Now that the April 15th tax filing deadline has come and gone, you could wait until January to think about taxes again – but that’s a bit like waiting until the night before a major exam to start studying…you might get through it, but it probably won’t yield the best results. If you want a smaller tax bill in 2025, consider starting now to come up with a strategy.

In this month’s newsletter, we’ve included four areas to review as you begin creating your 2025 tax plan.

Also in this edition, learn how to score the best travel deals this summer, read through estate planning tips for every family, and discover the unexpected benefits of doodling.

Please pass this information on to anyone that may find it useful and call if you have any questions or concerns.

Time to Start Your Tax Planning

Lowering your tax bill next year works best as a planned event. So if you are interested in breathing a sigh of relief come next April, consider a review of these four areas as you create and implement your tax plan for 2025.

#1 – Your Home

Your home can create unexpected tax liabilities. Property value appreciation, home improvements, and refinancing your mortgage influence how much tax you pay.

When your home’s value increases substantially, you might pay higher property taxes. Selling a home can also lead to capital gains taxes if you’ve lived in the property for less than two years or exceed the home sale exclusion amounts.

Tax Planning Tips for Your Home:

• Get a professional property assessment to ensure you’re not overpaying property taxes. If so, know your location’s time frame and process to amend your property’s value in their formula.
• Consider timing home improvements to manage potential tax consequences by being smart about when assessments are applied in your location’s property value.
• If selling, understand capital gains exclusion rules ($250,000 for single taxpayers, $500,000 for married couples)

#2 – Your Investments

Review your refinance closing disclosure to identify deductible mortgage points or fees

Investment income can impact your tax bill. Capital gains, dividend distributions, and frequent trading can all cause tax consequences.

Different investments also face different tax rates: Short-term capital gains get taxed at higher ordinary income rates and long-term gains typically receive more favorable treatment.

Tax Planning Tips for Your Investments:

• Implement tax-loss harvesting to offset capital gains
• Hold investments for more than a year to qualify for long-term capital gains rates
• Consider tax-efficient investments like index funds or ETFs
• Maximize contributions to tax-advantaged accounts like 401(k)s and IRAs

#3 – Your Retirement

Retirement accounts offer financial opportunities. But they can also cause tax pitfalls. Required minimum distributions (RMDs), early withdrawal penalties, and the tax treatment of different retirement account types influence your tax bill.

Tax Planning Tips for Your Retirement Accounts:

• Understand RMD rules and plan withdrawals strategically. Sometimes the most cost-effective plan withdrawals occur long before the RMD rules come into play!
• Consider tax-efficient Roth conversions to manage future tax liability
• Maximize health savings account (HSA) contributions as an additional retirement account
• Explore catch-up contributions if you’re age 50 or older

#4 – Your Life Events

Major life changes can dramatically change your tax situation. Marriage, divorce, having children, changing jobs, or experiencing significant income shifts can all reshape your tax liability.

Tax Planning Tips for Life Changes:

• Reassess your filing status as life changes may affect your tax bracket and deductions
• Track new deductions and credits as life events like adoption or education expenses may qualify for specific tax breaks
• Understand the age triggers built into the tax code and plan accordingly. This is especially important to understand as your children get older.

Sometimes your tax plan will show you an unavoidable, upcoming tax event, but you can plan for it to avoid a surprise. But other times your plan can help lower your tax liability, so it is best to begin as soon as possible.

How to Score the Best Travel Deals This Summer

With summer just around the corner, now is the perfect time to plan a warm weather getaway that won’t break the bank. Whether you’re jetting off to a tropical paradise or exploring a bustling city, getting the best travel deals requires a bit of planning. Here’s how you can save big on your next adventure.

• Book airfare on Sundays. Data from the Expedia 2025 Air Hacks Report shows that Sunday is the cheapest day to book airfare, just as it has been the last four years in a row. According to the study, travelers who book domestic flights on Sundays can save as much as 6%, while those who book international airfare may save up to 17% compared to booking on Monday or Friday.
• Be flexible with travel dates. Being willing to fly on different days of the week can also help you score some savings. Data also shows that flying domestically on Saturday instead of Sunday can save 17%, while flying internationally on Thursday instead of Sunday can save 15%.
• Use fare comparison and deal websites. Several websites can help you compare flight costs across multiple airlines and destinations with ease, including Google Flights and Skyscanner. The Hopper app can even tell you when it’s the best time to book airfare and hotels to get the lowest price.
• Leverage loyalty programs and credit card rewards. Frequent flyer miles, hotel loyalty programs, and travel credit cards can help you save on flights, accommodations, and even dining. Many cards offer sign-up bonuses that can cover a free flight or hotel stay.
• Consider alternative lodging options. Hotels can be pricey in peak summer months, so consider alternatives like vacation rentals, hostels, and guesthouses if you want to pay less. If you can share a vacation villa or rental home with other family members or friends, you may be able to pay even less.
• Bundle and save. Booking flights, hotels, and rental cars together through sites like Expedia, Kayak, or Priceline can help you score a lower total package price on your summer vacation. You can even search for vacation packages at a discount through your favorite frequent flyer program using options like American Airlines Vacations and Delta Vacations.
• Don’t forget travel insurance. While it’s an added expense, travel insurance can save you thousands in case of cancellations, lost luggage, or medical emergencies. Some credit cards even offer free travel insurance when you use them to pay for your trip.

Scoring the best summer travel deals is all about planning, flexibility, and knowing where to look. By using these ideas, you can enjoy an amazing vacation without overspending. Start searching now, and you might just land your dream trip at a great price.

Estate Planning: Tips for Every Family

If juggling priorities were an Olympic sport, young parents would win the gold medal. Raising kids, advancing careers, paying off student loans, and saving for a home is a lot. All this makes estate planning feel like a tomorrow problem.

But estate planning puts you in charge of your family’s financial future if the unexpected happens.

Here are three ways you can protect your family’s future by starting your estate planning today.

Protect your current income

Your current income is the fuel that keeps your household going. Here are several ideas to protect your earnings:

• Minimize tax liabilities using tools such as trusts or family limited partnerships can shield assets from estate or capital gains taxes.
• Protect against lawsuits and creditors by structuring ownership through legal entities or trusts. These separate legal entities can make it harder for lawsuits or creditors to reach your personal income or business revenue.
• Ensure income continuity if incapacitated. With powers of attorney and living trusts in place, you can tap someone you trust to manage your income and financial affairs if you’re unable to do so.

Protect your future income

Estate planning isn’t just about distributing assets—it’s a proactive way to secure financial stability down the road. Here are several ideas to protect your future income.

• Preserve wealth using tax planning strategies. Trusts, retirement accounts, and gift giving can minimize your future estate and income taxes, helping you retain more of your earnings over time.
• Safeguard business and investment income. Planning for succession or setting up buy-sell agreements ensures that income from businesses or investments can continue in the future, even after death or incapacity.
• Provide long-term control over assets. Set specific terms in wills or trusts to dictate how and when income-generating assets are used. This can protect them from mismanagement or being wasted in short order.

Protect your children

Estate planning isn’t just about money – it’s also about protecting your kids if something happens to you. Here are several ways to protect your children.

• Ensure guardianship. If you pass away or become incapacitated, a will lets you name who should raise your children. Without this, the decision goes to the courts, and a judge will choose a guardian. Naming someone in your estate plan ensures your children are raised by someone you trust, in a stable and familiar environment.
• Control their inheritance. A well-structured estate plan allows you to manage how and when your children receive their inheritance. For example, you can create a trust and decide when to distribute money and for what purposes, such as education, health care, or buying a home.
• Minimize conflict. When your wishes are clearly written in legal documents, it leaves less room for disagreements among family members. This can help prevent costly legal battles or emotional fights over who should care for the kids or how money should be used.

Many people believe estate planning is only for the very wealthy. But as you can see, managing an estate is important for everyone, regardless of income level. Consider reviewing your situation with a qualified expert and help create peace of mind for yourself and your loved ones.

The Unexpected Benefits of Doodling

Ever catch yourself mid-call with the doctor or your internet provider, only to hang up and find your notepad full of squiggles, stars, and mystery objects? No, you weren’t just zoning out…you were doodling!

You may have dismissed these spontaneous little sketches your hand makes while your brain is deep in thought, but your doodles often have a surprising secret life. Here are three unexpected perks of letting your writing tool of choice wander around.

• Boosting your memory. Doodling isn’t just a mindless habit – it’s a memory booster in disguise. Think back to your days as a student, frantically jotting down notes during class. Sure, those scribbles helped you study late into the night, but part of the magic was in the act itself – writing things down can help wire them into your brain. Doodling works the same way. It transforms what you’re hearing into visual cues, helping your mind remember the important stuff. It’s like your pen is quietly highlighting things your brain wants to remember.
• Sharpening your focus. Doodling might be your secret weapon for staying on task. In a Harvard Medical School study led by psychologist Jackie Andrade, 40 people listened to a dull 2.5-minute voicemail (riveting stuff!), and guess what? The ones who doodled remembered nearly 30% more than those who didn’t. Why? One theory: doodling keeps just enough of your brain busy to stop it from drifting off into daydream land, so the rest of your mind can stay tuned in. It’s like mental noise-canceling – with a pen.
• Relieving your stress. Doodling is like a mental exhale. Unlike drawing something specific, there’s no plan, no pressure with doodling — just your pen or pencil doing its thing. That’s the beauty of it. When your brain’s juggling a dozen to-dos and overthinking every little detail, doodling gives it a moment to wander. No rules, no goals, just shapes and squiggles that let your mind breathe. It’s a quiet reset. And in the middle of a hectic day, that tiny act of letting go can feel like a full-blown stress detox.

With so many things grasping for our attention, it can be difficult to focus and retain information in the middle of a busy day. If you find yourself drifting during a meeting, or your kids struggle to pay attention to subjects they find less interesting, give doodling a try to see if it works for you!

Springboard Your Summer Job into Valuable Experience

A summer job is more than just a way to earn extra cash — it’s an opportunity to build valuable skills, expand your network, and set yourself up for future success. Whether you’re working at a local café, interning at a company, or taking on freelance projects, here’s how you can turn your summer job into a powerful stepping stone for your career.

• Set clear goals from the start. Before your first day, ask yourself what you want to gain from the experience. Are you looking to develop customer service skills, broaden your technical know-how, or make industry connections? Setting clear objectives can help you stay focused and make the most of your time.
• Hone your work ethic. Employers value workers who show dedication and reliability. Arrive on time and complete tasks efficiently. Demonstrating responsibility and professionalism will not only leave a positive impression but can also lead to recommendations and future job offers.
• Take the initiative. All companies appreciate employees who are proactive when it comes to finding work. Instead of just completing assigned tasks, look for ways to contribute more. Offer to help with new projects, ask thoughtful questions, and show a willingness to learn. Your enthusiasm can lead to greater responsibilities and more opportunities down the line.
• Build your network. Get to know your coworkers, supervisors, and even customers. These connections could become references, mentors, or even future employers. Make a good impression by being reliable, appropriately dressed, and respectful.
• Learn new skills. Even if your summer job isn’t in your desired career field, you can still gain valuable skills. Time management, communication, teamwork, and problem-solving are all skills that apply to any profession. Recognizing and developing these abilities will help you stand out in future roles.
• Seek valuable feedback. Ask supervisors and coworkers you look up to for feedback on your performance. Constructive criticism helps you grow and shows that you’re committed to improvement. Use their advice to refine your skills and work habits so you can become a more effective employee or business owner in the future.
• Stay in touch. A summer job doesn’t have to be a one-time experience. Keep in contact with your employer and colleagues by sending occasional emails or connecting on LinkedIn. This keeps you on their radar for future jobs or recommendations, and ensures you are easy to reach if an opportunity comes along.

Your summer job can be much more than a seasonal gig — it can be the foundation for your professional growth. By setting goals, being proactive, and building strong relationships, you can transform your temporary job into a meaningful boost to your career.

Keep Great Business Records with These Tips

Your bookkeeping system is the financial heart and lifeblood of your business. When set up and operating properly, your books help you make smart decisions and seamlessly turn your financial data into useful information. Here are four key characteristics to building and maintaining a healthy bookkeeping system:

• Select the proper accounting method. There are two different methods for recording transactions: cash-basis and accrual-basis. In general, the cash-basis method records a transaction when a payment is made, while the accrual-basis method books the transaction upon delivery of the good or service. Cash-basis is easier to track and a useful option for smaller businesses and sole-proprietors. Larger businesses who buy from vendors on account (accounts payable) generally use accrual-basis accounting.

Selecting the proper method affects any related financial transactions and how your financial statements are displayed. A correct approach will also include consideration of outside factors, including IRS rules (businesses with more than $25 million in gross receipts must use accrual-basis), bank covenants, and industry standards. Once a choice is made, it can be changed but it must be properly reported to the IRS.

• Create an account structure that fits the company. Every business has a chart of accounts included in their bookkeeping system. These accounts sort the business’s transaction data into six meaningful groups. They are assets, liabilities, equity, income, cost of goods sold and other expenses. Each group will often have numerous accounts and sub-accounts associated with them.

Having the right mix of accounts, created and grouped in an organized fashion, will help you properly classify transactions and prepare usable financial statements. The proper account structure for your company will mesh with your specific information needs.

• Enter accurate and timely transactions. The value your data provides is dependent on each transaction being recorded correctly and on time. Entering transactions in the wrong account can cause major issues down the road. Financial reporting that is delayed can hide problems that need immediate attention. Some transactions are relatively straightforward, and some are more complex (like payroll, accruals and deferrals).

It’s important to have someone who understands both your business and the accounting rules to enter your transactions in a timely fashion. In addition, a good month-end close process that involves reviewing each account will help you identify and fix mistakes from the initial entries.

• Establish financial statements for decision-making.The main financial statements are the income statement (income – expenses = gross profit), the balance sheet (assets – liabilities = equity) and statement of cash flow. Each statement has a specific purpose:
  • Income statement. The income statement shows company performance for a select period of time, typically monthly with a full-year summary. At the end of each year the income statement restarts.
  • Balance sheet. The balance sheet displays a company’s overall health on a specific date. It is perpetual. This means it doesn’t end until the business is closed or sold. It includes one line that summarizes the current year and prior year results from the income statement.
  • Statement of cash flow. This statement summarizes the inflows and outflows of cash. It ensures you know whether you have enough cash and the pattern of your cash position over time.

If properly executed, your bookkeeping system will create accurate financial statements that can be used to make key financial decisions. Feel free to call with any questions or to discuss bookkeeping solutions for your business.

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

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