Pat Vitucci

Pat’s Weekly Commentary February 13, 2012

admin — Thu, 16 Feb 2012 06:55:36 +0000

My comments as a Bay Area Financial Advisor on my recent weekly update (February 13, 2012) entitled “What Goes Up…“: Red or Black. Odd or Even. Heads or Tails. Those things may be as good as any to figure out the stock market…from one day to the next. As the dust clears we are toying with the 13,000 mark and I believe the low point a few years ago was around 6500. How many people pulled out then and never returned? This is not an exacting science. Are you investing for the long run…or the short run? A question that only you can answer. Incidently, picking heads or tails is better odds than red or black or odd or even.

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Pat’s Weekly Commentary January 23, 2012

admin — Thu, 26 Jan 2012 02:16:01 +0000

My comments as a Bay Area Financial Advisor on my recent weekly update (January 23, 2012) entitled “The January Effect“: Well, as far as January being a barometer for the direction of the market for the rest of the year…that probably falls into the category of maybe…or maybe not. It may be like the Old Farmers’ Almanac taking a look at future weather patterns. We must remind ourselves that “past performance is not necessarily a predictor of future results.” As The January Effect points out there are certainly some positive factors this month such as the stock market hitting higher in January than in a long time. Does that forecast well for the rest of the year? If half of us say yes and half say no…we are certain that 50% of us will be right! 59785

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Pat’s Weekly Commentary January 9, 2012

admin — Wed, 11 Jan 2012 06:02:58 +0000

My comments as a Bay Area Financial Advisor on my recent weekly update (January 9, 2012) entitled “And We’re Off“: OK, here we are starting out in 2012 and I am going to start looking at the financial world as if the glass is half full. European debt situation? Note to Euro leaders: Just get that resolved and spare us the daily drama! We have some pretty positive news on the home economic front regarding sales and jobs and corporate earnings. Hopefully that will continue through the first quarter. Does that mean that portfolios will see a positive upswing? One can hope so. That’s if the glass is ….half full. 59421

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Top 10 2011 Year End Tax Planning Tips

admin — Wed, 14 Dec 2011 21:21:13 +0000

As the end of the year approaches, we know you are busy with holidays, family, and travel, but it is also a good time to do some last minute tax planning. As a courtesy, we want to provide you with a few eleventh-hour tax tips you may find useful. Although tax planning is rarely fun, these strategies could help you keep more of your hard earned money.

Year-end tax planning is especially challenging this year because of ongoing uncertainty related to whether Congress will enact sweeping tax reform. And even if there is no major tax legislation in the near future, Congress will still have to deal with a number of tricky issues in 2012, such as what to do about the expiration of the Bush-era tax cuts on December 31st. Regardless of what steps are taken, spending a little time on tax planning now is a good idea.

While our primary expertise lies in retirement planning, we have worked with our CPA friends to compile these tips for you. Before acting on any of the advice in this communication, we suggest you consult with your personal tax professional. If you don’t have one that you enjoy working with, please let us know and we will introduce you to one of our trusted associates.

1) Get Organized

This is an excellent time of year to get your financial house in order. Gather cash receipts to help you calculate possible deductions and miscellaneous payments. Do you have a hobby or activity that generates income? If so, any losses might also be eligible for deduction. Have you made home improvements? Charitable contributions? Get all of your documentation together early to make your life a little easier in April.

2) Contribute the Maximum to Your Retirement Plan

You have until April 17, 2012 to make IRA contributions for 2011, but the sooner you get your money into the account, the sooner it has the potential to start growing tax-deferred. Making deductible contributions also reduces your taxable income for the year. You can contribute a maximum of $5,000 to an IRA for 2011, plus an extra $1,000 if you are 50 or older. This limit can be split between a traditional IRA and a Roth IRA if you desire, but the combined limit is still $6,000. The amount you can contribute to a Keogh plan depends upon the type you choose.

3) Check Your IRA Distributions

You are required to make minimum distributions from your traditional IRA by April 1st following the year in which you reach age 70 ½. Failing to take out enough triggers a 50% excise tax on the amount you should have withdrawn based on your age, life expectancy, and the amount in the account at the beginning of the year.

If you would rather give the distribution to charity, you will be happy to know that the qualified charitable distribution (QCD) provisions were renewed for 2010 and 2011, allowing individuals age 70½ or over to exclude up to $100,000 from gross income that is paid directly from their individual retirement accounts (excluding SEP or SIMPLE IRAs) to a qualified charity. The excluded amount can be used to satisfy any required minimum distributions that you must otherwise receive from your IRA.

4) Fatten Your 401(k)

Tax-deferred investing is a smart choice because it allows your money to grow tax-free until you withdraw it. Maximize your 401(k) contributions, up to $16,500 or $22,000 if you will be age 50 or older in 2011.

5) Go Loss-Harvesting

Selling investments such as stocks that have experienced losses, can help to offset any taxable gains you have realized during the year. If your losses are more than your gains, you can use up to $3,000 of excess loss to decrease other taxable income. If you have more than $3,000 in excess loss, it can be carried over to the next year. You can use that loss to offset any 2012 gains, plus up to $3,000 of other income. Losses can be carried over every year for as long as you live.

6) Delay Some of Your Income

Income is taxed in the year it is received – but why pay tax today if you can pay it tomorrow instead? Depending on your circumstances, you may want to push some of your income into 2012. It’s tough for employees to postpone wage and salary income, but you may be able to defer a year-end bonus into next year. If you are self-employed or do freelance or consulting work, you have more flexibility. Delaying billings until late December, for example, can ensure that you won’t receive payment until 2012. Postponing your income is a good idea if you expect to be in a lower tax bracket next year.

7) Give Attention to Your FSA

This time of year is when you probably need to specify how much salary you’ll contribute to your flexible spending account. Not only is it appropriate to review your changing needs, but tax-free withdrawals can then be taken from these accounts for medical, dental, and child-care costs. You will forfeit any balance left in these accounts at the end of the year, so take advantage now by filling prescriptions early, making medical or dental appointments, or scheduling elective surgeries.

8)Accelerate Your Mortgage Payments

Unlike rent, which is paid in advance, mortgage payments are made at the end of your occupancy period. That means your January 1 mortgage statement represents interest for December, making it eligible for a tax break this year. By accelerating that payment even by just a day, you get an additional deduction for the interest paid. Don’t get greedy though. You can’t make your February, or any other upcoming, mortgage payment early to boost your year-end deduction amounts. Tax law generally prohibits write-offs for prepaid interest (although there is an exception for loan points in some cases). Note: Accelerating your mortgage payments may not payoff if you expect to be subject to the Alternative Minimum Tax (AMT). If you are unsure, discuss the matter with your tax professional.

9) Go Green

Buyers of plug-in hybrids and electric cars benefit from a tax credit of $2,500 to $7,500, depending on the size of the battery in the car. The credit maxes out at $7,500 for cars with a 16 kWh battery pack, like the Chevy Volt. The credits were provided as part of the American Recovery and Reinvestment Act, otherwise known as the “stimulus bill.” In addition, energy-efficient home improvements to your principal residence such as installing a heat pump, qualify for credit of 30% of the cost, and can be claimed on your 2011 taxes.

10) Be Charitable

A gift to a qualified charitable organization may entitle you to a charitable contribution deduction against your income tax if you itemize deductions. If the gifts are deductible, the actual cost of the donation is reduced by your tax savings. For example, if you are in the 33% tax bracket, the effective cost of a $100 donation is only $67. As your income tax bracket increases, the real cost of your charitable gift decreases, making contributions more attractive for those in higher brackets. For a person in the highest tax bracket, 35%, the actual cost is only $65. Not only can the wealthy afford to give more, but they receive a larger reward for giving.

Bonus Tips

Give a Gift

This time of year, many people choose to donate items to charity instead of making a monetary contribution. Not only does this save you money and prevent perfectly good items from getting wasted, but charitable donations can be deducted from your taxes as long as you get written documentation of the donation.

Most gifts are not subject to the gift tax. For instance, you can give up to the annual exclusion amount ($13,000 in 2011) to any number of people every year, without facing any gift taxes. Recipients never owe income tax on the gifts. In addition to the annual gift amount, you can give a total of up to $5 million starting in 2011 in your lifetime before you start owing the gift tax.

Fund an Education

The American Opportunity tax credit is valued at $2,500 for 2011, up from $1,800 in 2008. Because a tax credit reduces your tax bill dollar-for-dollar, this basically means the government will give you up to $2,500 per year for each qualifying college student in your family. And unlike the old Hope credit, which only covered the first two years of college, the American Opportunity credit can be claimed for all four years of post-high-school education. You can get the maximum credit if you spend at least $4,000 in qualifying expenses, which now includes the cost of books, tuition, and fees.

Buy Something Nice

Sales taxes you have paid on the purchase or lease of a vehicle, the purchase of a boat or aircraft, or the purchase or renovation of a home may all be eligible for deduction against your federal income taxes. Additionally, people who claim the sales tax deduction don’t have to report any state income tax refund as taxable income in the following year. So if your sales tax deduction is about the same as your income tax deduction, you’ll probably come out ahead by taking the sales tax deduction.

In conclusion:

We hope you will find some of these strategies useful as you go through your tax planning process. One of the ways we help our clients is by working hard to provide tax-smart investment strategies to minimize the impact Uncle Sam can have. In addition, we consider it our responsibility to educate you about things that could affect your financial future. As always, feel free to contact us with any questions, and to discuss points of interest with your tax professional as there may be crucial details involved in making your plan effective.

For more information please contact:

Vitucci & Associates Independent Financial Advisors

877 Ygnacio Valley Rd. Ste. 220

Walnut Creek, CA 94596

800-472-8305

www.dontinvestandforget.com

Serving Clients at 11 Bay Area Offices

Footnotes, disclosures and sources:

Securities and investment advisory services offered through NATIONAL PLANNING CORP. (NPC), NPC of America in FL & NY, Member FINRA/SIPC, and a Registered Investment Advisor. Registered Representatives of NPC may transact securities business in a particular state only if first registered, excluded or exempted from Broker-Dealer, agent or Investment Advisor Representative requirements. In addition, follow-up conversations or meetings with individuals in a particular state that involve either the effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made absent compliance with state Broker-Dealer, agent or Investment Advisor Representative registration requirements, or an applicable exemption or exclusion. Vitucci & Associates and NPC are separate and unrelated companies.

Neither Pat Vitucci nor National Planning Corporation provides tax or legal advice; consult your tax or legal advisor regarding your particular situation.

These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative or named Broker dealer, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

The information contained in this material is being provided for general education purposes and is not intended to be used or interpreted as specific legal, tax or investment advice. It does not address or account for your individual investor circumstances. Investment decisions should always be made based on your specific financial needs and objectives, goals, time horizon and risk tolerance. Consult your tax advisor or attorney regarding tax issues specific to your circumstances.

Neither National Planning Corporation nor any of its employees or representatives are authorized to give legal or tax advice. You are encouraged to seek the guidance of your own personal legal or tax counsel.

The information in this document is provided by a third party and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. While the publisher has been diligent in attempting to provide accurate information, laws and regulations change frequently, and are subject to differing legal interpretations. Accordingly, neither the publisher nor any of its licensees or their distributes shall be liable for any loss or damage caused, or alleged to have been caused, by the use or reliance upon this service.

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Pat’s Weekly Commentary December 12, 2011

admin — Tue, 13 Dec 2011 20:21:09 +0000

My comments as a Bay Area Financial Advisor on my recent weekly update (December 12, 2011) entitled “Naughty or Nice“: So what’s up with Europe anyway? Last week the 17 nations that use the euro signed a treaty that was supposed to make everything better and our markets reacted very positively. Not so fast. Monday morning of this week there was a hint that maybe everything wasn’t just right yet. We seem to be stuck following a European bouncing ball. At the very least the European crisis or non crisis is…complicated. Meanwhile, back in the good ‘ol US of A…people are in a holiday shopping mood. More on -line sales. More in store sales. I wonder how the holiday shopping is in Europe? 58824

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Pat’s Comments on recent KGO radio changes

admin — Tue, 06 Dec 2011 23:54:55 +0000

Vitucci & Associates regrets the recent programming decisions of the new KGO management. We will continue to be devoted to our friends Len Tillem and Dr. Bill Wattenburg. We are re-evaluating our relationship with the station. We plan to continue our long standing relationship with Len Tillem and Bill Wattenburg in their future endeavors.

Pat’s Weekly Commentary November 14, 2011

admin — Wed, 16 Nov 2011 16:14:03 +0000

My comments as a Bay Area Financial Advisor on my recent weekly update (November 14, 2011) entitled “European Politics Move Markets“: Maybe we could solve some of our economic worries if we went back to the communication systems we had in, let’s say, 1940. No TV. I think “The Abbott and Costello Show” was on radio. No computers. No internet. No fax machines. No I Phones or I Pads or other such devices. Basically we read newspapers and magazines. Imagine that! We probably wouldn’t know what was going on in Greece or Italy. We may not have even known where they were. We were just perking along here in the US waiting for Ted Williams to .406 in 1941. Not bad thoughts. But maybe…unfortunately…we can’t turn back the clock. 58333

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Pat’s Weekly Commentary November 05, 2011

admin — Wed, 09 Nov 2011 19:03:24 +0000

My comments as a Bay Area Financial Advisor on my recent weekly update (November 5, 2011) entitled “The Cycle of Growth“: So what is the most important indicator for us to get our economy on the move once again? Wouldn’t it be great if we could just ask Target or McDonalds or some big company like that…”How did you do last week?”…and that would give us the right answer? How simple would that be! No question that jobs plus spending is a pretty good combo. Ooops! How is Greece doing these days? Better call the big wigs in Europe. How about those big container ships? How full are they pulling into and out of our harbors? How long is a neighbor’s house on the market for sale? Let’s check local car dealers to see how car sales are doing? Are the movie houses full with people paying $11.00 to see a movie? The football games seem to do well. Maybe THAT is the answer: If the 49ers and Raiders sell out each week, our economy is just fine. But wait. What about Buffalo and Miami? Do they sell out? There was a movie not too long ago called “It’s Complicated”. That may be the answer.

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Pat’s Weekly Commentary October 31, 2011

admin — Thu, 03 Nov 2011 18:01:38 +0000

My comments as a Bay Area Financial Advisor on my recent weekly update (October 31, 2011) entitled “Up, Down,Up…What Now?“: We are certainly aware that the S&P 500 and DJIA can do wild swings in just a matter of hours. How is that possible? Is there really that much”change” in the world to propel the US markets up and down so fast? One of the reasons is that we get so much information so quickly compared to say 50 years ago. The internet and other media bombard everyone all the time and seemingly almost any bit of news triggers something. Is it simply TMI…too much information? Negative reports about the status of Greece caused a drop in US markets. Then good news that the European Union leaders are working to resolve issues in Greece brought the market back up. What will happen tomorrow or the next day? Stay tuned.

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Indices are unmanaged measures of market conditions. It is not possible to invest directly into an index. Past performance is not a guarantee of future results. 57940

Pat’s Weekly Commentary October 24, 2011

admin — Thu, 27 Oct 2011 05:22:43 +0000

My comments as a Bay Area Financial Advisor on my recent weekly update (Oct 24, 2011) entitled “Europe vs Earnings“: It is hard for the average American to imagine why our US market indicators would care THAT MUCH about how the economy of Greece is doing, for example. And Greece is about the size of Utah. Simply put, it is complicated. We are “joined at the hip” to some extent with Europe. And Greece is part of Europe and there can be somewhat of a domino effect. So we just have to live with that notion and be encouraged that European leaders will do the right things. Meanwhile if we look at what is happening in the US this week, things are pretty positive: Companies are beating earnings estimates. Revenue is good. Unemployment is down somewhat. Much of housing construction is up. Many analysts say some stocks may be undervalued. All of that is pretty good news. Let’s pull for the Euros!
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