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Inverted Yield Curves, the Next Recession, and You

Posted by on Aug 20, 2019 in Investments, Planning, Taxes

I initially started this post two weeks ago, after we woke up to the news of Dayton and El Paso, which made it feel like the world was falling apart. That shock was followed by China’s devaluation of its currency, a different kind of shock, and the financial world seemed like it was falling apart, too. By the time I’d finished a first draft that Monday morning and guessed that China would be labeled a currency manipulator, markets rebounded. And China was labeled a currency manipulator. Then came this last week, when we saw an inverted yield curve, and markets tanked again. By the end of the week, markets had recovered, and you were probably throwing your hands up or wishing there was a nice pile of sand into which to stick your head. Let’s look at what happened to the stock market over the first two weeks of August when all this was going on, then we can talk about what was behind it. The S&P 500 tracks the largest US companies, and we’ll use that index here: The first dip in the chart is China’s devaluation of its currency. The next, leading up to the plunge on Friday, August 9th, was related to squabbling over name-calling between the US and China, increasing tensions in Hong Kong when anti-government protests over a proposed extradition law turned violent,  and the beginnings of investor flight from stocks to bonds. The sharp uptick of markets opening the following week on August 13th was a reaction to the Trump’s Administration’s announcement of a delay in implementing tariffs on China from September until mid-December. News of the inverted yield curve came on the 14th, and markets collapsed. On Friday, Walmart’s quarterly earnings beat estimates, and that news along with other strong sales numbers in retail led to a rise in non-tech stocks. So, yeah, if you’re feeling like following the ups and downs of the market is like playing whack-a-mole, you’d be right. The big issues of a trade war with China and an overall flight to safety in financial markets are the two main things to watch, and we’ll take each in turn. China’s Currency Devaluation At the beginning of the month, the People’s Bank of China (PBOC) devalued the yuan, citing “unilateral and protectionist measures as well as the expectation of additional future tariffs on Chinese goods.” President Trump threatened China with an additional 10% tariff on Chinese goods to go into effect in September, despite reported progress on trade. When I was in grad school, even after studying economics in college and working in finance, taking an international investments class was like trying to think in an extra dimension. Supply and demand charts I understood. But now throw in the impact of multiple currencies? Until we all move to bitcoin, global commerce will still require an extra step: If I want to buy something made by someone using a different currency, first I have to buy some of their currency, then buy their product using their currency. When the US puts a tariff on Chinese goods, it costs more to buyers here to import their products. So your Chinese-made clothes and electronics become more expensive to the stores here. Those stores have to buy their products in the local currency...

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Lessons from Apollo 11 at 50

Posted by on Jul 24, 2019 in Community, Family, Planning, Relationship, Technology, Women

This weekend, the Apollo 11 moon landing celebrated its 50th anniversary. The event was just on the edge of my personal history: I was five (and a half – back when counting halves was important). The experience of Apollo 11, and the missions that came after, shaped me and the way I see the world. I’ve been a space geek since I can remember. A highlight of my life was a trip to the Kennedy Space Center (KSC) in the late 1990’s, an outing during a business conference. Apollo 11 was one of many missions in the Apollo program, which followed the Gemini program and the Mercury program before that. The tour at KSC recreated the last two minutes of the Apollo 8 mission launch. Apollo 8 flew the first humans into the Moon’s orbit, and gave us the famous photograph, ‘Earthrise.’ After a history lesson about how many things had gone wrong – seriously wrong – just prior to that mission, we visitors looked into a room with the actual consoles from that Mission Control room, the jackets and windbreakers with the logos of companies now gone, or merged into others, hanging on the backs of chairs: McDonnell Douglas, Northrup Grumman, North American Aviation. It was 1998 and we were all thinking about Y2K and what could go wrong. At the time I was at Starbucks and responsible for the company’s banking relationships; one fear was that the electronic ledger that banks used would go kablooey as we flipped into the new century and money would disappear off the books (it did not). The Apollo 8 launch required more than 400 different systems to work together, systems built by many different companies, each responsible for a piece of the whole. We counted down to zero – Ignition – and the room shook and filled with light and sound. Apollo 8 had launched! Then we walked out into the hangar, out under a Saturn V rocket. All 363 feet, 3,270 tons of it. We sat down for dinner, of which I have no memory. Everything stopped with that rocket. The technology of the time: The telephone. The typewriter. The transistor. Not yet invented: The personal computer. The cellphone. The internet. Pong. Thirteen missions using a Saturn V rocket were flown, all of them successful. They completed these missions and never carried a weapon into space. “We came in peace for all Mankind.” With a backdrop of great civil unrest and international turmoil, we found the money and the focus to send men to the moon. There were detractors; there were plenty of domestic issues that needed attention, too. The same can be said today. Destination Moon In homage to the anniversary of the Apollo 11 landing, I went to the Museum of Flight outside of Seattle and stood inches from the Command Module, Columbia, that splash-landed in the Pacific, bringing Michael Collins, Buzz Aldrin, and Neil Armstrong safely back to Earth. There were a lot of things that had to happen before Columbia came back to us. Tests, mistakes, massive, tragic failures. Many of the Apollo missions you don’t hear much about were testing equipment and different stages of what would become the trip to land on the Moon. Making mistakes, course correcting along the way We talk a...

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A Mother’s Day Wish List

Posted by on May 12, 2019 in Family, Women

  My mother was a strong and resilient woman, creative and resourceful, quick to help and even quicker to laugh. I adored her.  People often commented that she’d had a hard life, and she always countered that it was full of interesting experiences. I loved the stories she told about her life, but I also wished she’d had it a little easier. My mother came to the US in 1952 at sixteen. She spoke five languages, none of which was English. Assimilation was high on her list and she quickly absorbed all that was American: Saturday night dances, movies & television, Elvis Presley. After secretarial school, she lived with (and paid rent to) her parents while she started work at a bank. She met my father and they married in the early 1960s. They then promptly loaded up everything they had into a Ford Galaxy and headed west, settling in the Southern California suburbs. My father worked part-time and started school on the GI bill. I was born two years later, and my brother two years after that. My mom had loved her job at the bank, as one of three assistants to the bank president. She loved living in a big city. But as a single woman in the 1950s and early 1960s, her life was limited. It was a challenge for a young woman to live on her own, an even a greater challenge to stay single. Once married and without any family nearby in those early years in California, she was on her own to figure out how to run her house and take care of two small children. Once my brother and I were in school, she went looking for a job. She found one as a part-time bookkeeper for a local dairy. That job provided much-needed additional income to the household, but also much-needed social connection for my mother, and at least one trip for us to the dairy farm itself, complete with fragrant cow pastures and a dog named Fresca. By now, it was the late 1960s. We’d sent men to the moon, but women could still get fired for getting pregnant, contraception was not widely available, and banks could refuse to extend credit to women. Betty Friedan exposed “the thing that has no name” in 1963, but my mother already knew what it was: it was the albatross of economic dependence, of limiting cultural norms, and the prevailing expectations about mothers and motherhood. How much easier have we made mothers’ lives today? Here’s what’s on my Mother’s Day Wish List: Pay equity: Becoming a mother should not mean you are worth any less as an employee. Neither parenthood nor marital status should determine pay, yet married men are generally paid more than single men (and most women, married or single). Paid family leave: We make accommodation for employees to address and recover from other medical events; time to properly heal and bond makes mother and baby healthier and most women cannot afford to take unpaid leave to do this. (Note this is family leave, not just maternity or parental leave; women are more likely to take a second round of leave, when they assume caregiving for elderly parents, impacting their earning potential a second time.) Access to quality child care: Becoming a mother shouldn’t mean you have to choose between your...

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Valentine’s Day Planning

Posted by on Feb 15, 2019 in Community, Estate Planning, Family

If all the pink hearts and chocolates you’ve been seeing in stores since just after Christmas weren’t enough of a giveaway, it’s Valentine’s Day. The first conversational candy hearts were crafted by the New England Confectioners Company in 1866.  Yes, that means we’ve been doing this for over 150 years.  And this year you probably heard that due to a change in control at the company, it would not be producing the chalky, nearly flavorless candies.  Yet Valentine’s Day marches on.  The National Retail Federation projects that we will spend $19.6 billion this year on Valentine’s Day. All the hubbub can leave many feeling like they’re missing something: a romantic partner, a partner who is romantic, or the right combination of candlelit dinner/jewelry/flowers/candy. Setting aside the consumerist take-over of the day (as well as its dark history), and considering its modern meaning more broadly — as a celebration of love  — that is a worthy goal.  Love is one of the few truly infinite resources we have, and it takes many forms: romantic love, friendship, familial love, self-esteem or love of oneself, and love outside of one’s self, whether that be for humankind, nature, a vocation or God.  Building a truly rich life incorporates as many of the types of love as possible. Celebrating and enhancing these connections is what we strive to do. Valentine’s and Love Last week I went to hear John and Julie Gottman talk about love. Not about finding it, but about knowing when you really have it, and about keeping it once you do. The Gottmans were at Town Hall to promote their new book, Eight Dates: Essential Conversations for a Lifetime of Love. Gottman and his colleague Robert Levenson founded the “Love Lab” 45 years ago. As the story goes, they were “two clueless guys who knew nothing about relationships” who decided to research relationships.  John recalled how, 33 years ago as a newbie to Seattle, he decided to answer every personal ad in the Seattle Weekly.  In two months, he dated 60 women, and that experience was the start of his “date-a-base.” Over the years at the Gottman Institute, they studied 3,000 couples to see if they could find scientific evidence of the characteristics of long-lasting love. John’s methodology and the Love Lab developed their renown based on their 94% accuracy rate in predicting whether couples would stay together. Love and Connection When asked about what keeps people on the hunt for love, despite rejection and failures, Julie Gottman noted that at the core of their research they find that what we all want is connection.  She says this, and the room gets quiet.  At the end of the day, we all want to be valued, to be seen, to be heard, to be loved. Whether we’re coupled or not, this need for connection unites us all. Love In Many Forms / On Many Forms The other take-away from the Gottmans’ talk is how the base of any good relationship is in how we communicate. Whether love between romantic partners, friends, within families of origin and of choice, communities to which we belong – all types of love enrich our lives.  You want to enjoy them while you have them, and you might want to leave something to them after you’re gone. ...

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Planning for Joy

Posted by on Jan 7, 2019 in Community, Health, Simplicity

Yes, losing 10 pounds might bring you joy when it happens. Giving up red meat and quitting smoking will help improve your health over time. Saving more money will result in meeting financial goals sooner, or with greater confidence, and you know I’m going to encourage this, but it won’t happen overnight. I cannot object to any of these resolutions. They are all laudable. They also require change, and change is hard. It takes at least three weeks to change a habit, and often longer. By all means, get started on those resolutions (or re-start them), but also plan for greater joy. In addition to my New Year’s Resolutions, here’s what I’m planning to add more joy to my life: 1. Play My dog has a good life. On her worse days, she suffers from the boredom of watching me work. Since I have to work to keep a doghouse over her head, she’s going to have to learn to deal with it. And yet, that doesn’t mean I can’t learn a thing or two from her, too. Often when I’m downstairs in the office, she is upstairs in her corner perch, watching the neighborhood scene. I’ll hear her pad down the stairs and come around the corner into the office. Every time she does this, I greet her with my happiest dog-voice, and take a break in what I’m doing for a pet and a little play. I say I do this for her, to have good associations with my office so she’ll hang out here. In truth, I find it is good for me, as well. I am terrible at taking breaks, and the dog is a natural. I could just set a timer and tell myself to take a break. How much more fun it is, though, to unleash the joy of seeing my dog prance around the office with her little paws in the air, her play-bow, and her goofy look, when I take a breath before I start a new project. 2. Organize My Desk I know this sounds like work. I am a planner by nature, and I like order in my universe. Maybe it’s a coping mechanism, but it also helps me to focus and relax into whatever I’m doing when I’m in a clutter-free zone. My new house is slowly getting organized, but not yet up to my standards of order, and it’s stressing me out. As a business owner, there is no end to things to do for the job. A clear desk is an accomplishment, too. My plan for the New Year at work is to close out each day putting my desk in order, filing papers, and scheduling the next day. Earlier in the business I sublet office space from a large engineering firm. The sliding glass doors to each office had no locks. For practical purposes, I ended each work day putting all my projects away, under lock and key. Starting the next day was bliss! Taking joy in sitting down and intentionally beginning a new project, rather than staring down a pile of ongoing work, is my goal for 2019. I’ve done it before, and I know I can do it again! If you’re inclined to try a bit of rearranging to de-clutter your space but...

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Blind Spots and Seeing the Whole Picture

Posted by on Jul 27, 2018 in Community, Family, Investments, Planning, Relationship

I’m a huge movie buff. In a different life, I would have been behind a camera, capturing people’s stories on film. One of the best stories I’ve seen on film is a movie making the festival circuit this year, Blindspotting. Daveed Diggs of Hamilton fame, along with longtime friend, poet and fellow actor Rafael Casal, have made a buddy movie like no other. It is smart, funny, painful, intense, and powerful. The writing is tight, the acting top-notch. The pair had been working on finding a way to produce the film for ten years, and its tone and subject matter could not be more pertinent today. And why am I telling you about this in a personal finance blog? The power of the movie is in its exercise in asking the audience whether they can see more than one thing at the same time: Can you see the two people in profile AND the vase? Can you see a black ex-con and a thoughtful man reinventing himself? Can you see that the friend you’ve known your whole life has a different experience of the world because his skin color is different than yours? Can you see a rich person and someone struggling? Can you actively look to see past your blind spots? This is important because without the ability to do so, you can miss important information about your friends, your family, the people you work with, and the broader world around you, as well as about your finances. What is “Blindspotting”? You’ll find that out when you go to see the movie. (And seriously, go see it.) We’ve all heard of blind spots: something in your range of vision that you should be able to see, but which is obstructed. The obstructions come from a variety of sources, but they can come straight from you: a blind spot is a predisposition, a prejudice. The most dangerous are the ones that you don’t know you have. Dangerous because you may think you are lighting candlesticks when you are lighting dynamite. We all have them. We are all products of our own stories and experience: our upbringing, our families, and the shortcuts that help us make sense of the world. Sometimes those shortcuts don’t show us the whole picture and result in blind spots. Here are three common ones that might impact your personal financial life, and one additional that can cause you to negatively affect someone else’s: • Confirmation bias – You embrace information that supports your perspective and cultivate a blind spot to that which contradicts it. You buy a stock and when there is good news about the stock, you acknowledge that and feel you have made a wise investment. When there is negative information about the stock, you discount the news. Recognizing that you’re likely to have a bias for the choices you make and being able to look past that blind spot and take in all relevant information about an investment will make you a better investor. • Over-confidence – What you’ve done in the past has been successful, so you are confident that you know what you’re doing. You have a blind spot to the role luck can play and to evidence itself, and in investment management, that’s one place where numbers don’t lie....

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Awakening From Slumber: Ten Years After The Financial Crisis

Posted by on Jun 27, 2018 in Community, Investments, Philanthropy, Planning, Retirement

Ten years ago I was in Rome and passed a shop on Via del Corso that sold crystal balls.  If I could have figured out how to bring one home without setting off airport security, I would have picked one up for the office. Then when you ask me what I think will happen in the market, I can point you to my little Roman souvenir and you will be able to see the future as well as I can. One of the closest things I have to a crystal ball is my relationship with PIMCO. In addition to being the largest bond manager in the world, PIMCO has the biggest and most geographically widespread research team I know. Most of you who work with me hold at least one PIMCO fund in your portfolio. Even if you don’t, you have heard of their research: they were the folks who came up with The New Normal to describe economic and financial life after the Great Recession. (And which you are likely using to describe any number of new trends in your own life.) Each year, PIMCO holds its Secular Forum, a gathering of its internal investment professionals along with guest speakers to discuss and debate the state of the global economy and markets over the next three to five years. Like much of PIMCO’s team, my background is in bonds as well, in markets for which critical to understand not only an individual issuer’s ability to repay a debt, but also the longer-term trends that will affect its ability to do so. As part of PIMCO’s investment process, its Secular Forum is designed to promote new ideas and differing points of view, to look into the future for the trends they believe will have important investment implications. They meet, then they publish their results for their advisory firm clients. The title of this year’s look at 2018 and beyond is called “Rude Awakenings.” That gives you an idea of where we are headed. The Great Recession: Ten Years Later After The New Normal, PIMCO dubbed the last five years (2014-2018) the “New Neutral.” This moniker described the low growth, low interest rate environment we found ourselves in world-wide, chugging along without much economic change, with your savings accounts earning next to nothing, but overall slow and steady growth in the economy. PIMCO predicts our economy will be more volatile over the next several years than this past New Neutral period, and the global political environment will be rockier as well. Nations which worked together to combat the aftermath of the Financial Crisis are showing nationalistic tendencies, meaning it may be every-nation-for-itself when the downturn comes. Neutral no longer, we will need to be prepared for Rude Awakenings. We will need to be flexible, to be able to respond to changing conditions, and to take advantage of opportunities in the investment landscape as they present themselves. Here are four of the Rudest Awakenings we can expect: Rude Awakening #1: You expect the same stock market growth in the next 10 years that we’ve had since the Financial Crisis. The big question many of us are struggling with is the state of the business cycle, and when we will shift from expansion and growth to contraction and recession. PIMCO’s research points to a good chance...

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Tax ALERT – What to Know For Year-End Planning

Posted by on Dec 24, 2017 in Divorce, Health, Taxes

As holiday lights twinkle around me and passersby bundle up against the cold, Congress was hard at work pushing their tax reform bill through the legislature. Their stated goal was to simplify the tax system, stimulate the economy and create jobs. There’s no simplification here, and economic stimulus is dubious, but there are a few things you need to know now if you want to do some 11th hour planning, especially if you have been itemizing your deductions: Mortgage interest – Interest on mortgages taken out on 12/15/17 or later is deductible only up to $750,000, down from the current $1,000,000 of mortgage debt Second Homes – This mortgage interest deduction is available for a personal residence and one other home Home equity loans – The deduction for home equity loans and lines of credit is repealed; interest on up to $100,000 of this debt was deductible State and Local Taxes (SALT) – Deductions for these taxes (including sales taxes in states with no income tax) combined with property taxes are capped at $10,000 PLANNING NOTE: You can pre-pay property taxes in jurisdictions where this is allowed. You can check here to see if you can accelerate a property tax payment in King County, WA and the San Francisco Bay Area: King County, WA: https://www.seattletimes.com/business/real-estate/king-county-dont-prepay-your-property-taxes-now-to-avoid-tax-hit-next-year/ SF Bay Area:  http://www.sfchronicle.com/business/article/Faced-with-loss-of-deduction-more-Bay-Area-12448244.php You expressly cannot prepay 2018 state and local income tax. Medical Expenses – The threshold for this deduction is 7.5% retroactive to 2017 through 2019 – then it goes back to 10%. Charitable Contributions – You now need substantiation for ALL charitable contributions, but the limit on what you can deduct has been increased from 50% of Adjusted Gross Income (AGI) to 60%. Miscellaneous Itemized Deductions – These deductions are currently subject to a 2%-of-AGI threshold, but are eliminated entirely after 2017: Moving expenses (except for the Armed Forces) Moving expense exclusion (for expenses paid by employer) Unreimbursed employer expenses (you file a Form 2106 for these) Qualified bicycle commuting ($20/month) Personal casualty losses (EXCEPT if in a disaster zone) Safe deposit box fees Tax preparer fees Investment advisory expenses PLANNING NOTE: You may want to ask your tax preparer if you would benefit from paying their fee before 12/31/17, while you can still take a deduction for it. Likewise, for your investment advisor. Here is a quick chart to give you an idea of the total of these miscellaneous expenses you must have before even have a deduction: AGI = $50,000, 2% = $1,000 AGI = $100,000, 2% = $2,000 AGI = $250,000, 2% = $5,000 AGI = $400,000, 2% = $8,000 Note: Any of you with AGI over $313,800 (Married Filing Jointly) / $261,500 (Single) will start to see your Itemized Deductions also reduced by the Pease limitation. Alimony – Marital support paid to an ex-spouse has been deductible by the payee and includible on the return of the recipient. For new divorce settlements, alimony is no longer deductible after 2018. Note: this change is a revenue raiser: Almost always the person paying alimony is in higher bracket than the recipient. Obamacare – Despite what the President has stated about repeal, technically the Affordable Care Act (ACA, aka “Obamacare”) is still on the books, as is the individual mandate. The individual mandate has NOT been repealed, but penalty for...

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Let the Debate Begin: Waiting for Tax Reform Details

Posted by on Apr 25, 2017 in Community, Philanthropy, Planning, Simplicity, Tax

Now that your 2016 tax return is behind you, you might be thinking about how tax reform changes expected under the Trump Administration might affect you. We are expecting a big announcement tomorrow, but despite some advance hype of “massive” changes, we’re likely to get only minimal details. The tax code is 4,029 pages and covers a multitude of taxes and entities. Tax reform, like Repeal and Replace, is going to take longer than originally planned. The Big Three Goals of current tax reform proposals are: 1-Reduction of the corporate tax rate 2-Lower tax rates on individuals (reducing tax brackets from 7 to 3) 3-Simplification In general, Republican proposals strive to broaden the tax base and lower tax rates. Under the banner of freedom and personal responsibility, these proposals support the idea that government should be as small as possible, providing minimal benefits to individuals, but counter that with lower tax rates, meaning more after-tax dollars in pocket, with which people are free to do what they want. What are the things to watch for tomorrow? Here’s what I’ll be watching for: 1. Corporate tax rate: Republicans originally wanted a 20-25% top rate, which even they felt was unrealistic. Expect Trump to hold out for the 15% corporate rate he campaigned on. The argument for a lower corporate tax rate is one of global competitiveness. The Tax Foundation reported that the US ranks 32 of 43 countries in the OECD in terms of international competitiveness. Note that the Tax Foundation is the oldest non-profit think tank in the country, described as an “independent tax policy research center” but it is also noted for a conservative, business-friendly bias. The top US corporate tax rate is 35%. But who really pays this? The US Government Accountability Office (GAO) issued a report in March 2016 that reviewed US corporate taxes over a five-year period. “From 2008-2012, profitable large US corporations paid, on average, US federal income taxes amounting to about 14% of the pretax net income that they reported in their financial statements. When foreign and state and local income taxes are included, the average effective tax rate across all of those years increases to just over 22%.” One of my sources for tax policy research is the Tax Policy Center (TPC), a nonpartisan joint venture between the Urban Institute and the Brookings Institution. From TPC’s perspective, a 15% corporate tax rate would make the US one of the lowest corporate tax regimes – until other countries cut their own rates, as they did after the Tax Reform Act of 1986. It would also create a ginormous loophole for high-income individuals. Under the Trump proposal, the 15% rate would apply to partnerships and sole proprietorships, which would create a huge path for tax avoidance by sheltering wages through such an entity. If the new rules let pass-through entities, such as sole proprietors and LLCs (like this firm) be taxed at the lower corporate tax rate, then that benefits me (and dentists). Let’s be clear about how this works: it’s not like there is one bucket for corporate tax receipts, and a separate one for individual tax payments, and yet another for payroll taxes. All tax receipts go into the same bucket, and go right out again to pay our collective expenses. Those...

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Planning in the New Year

Posted by on Jan 9, 2017 in Community, Family, Planning, Tax

You all know I love to plan. The power of planning comes from setting your intention, and taking action to make it happen. It’s about dreaming, but it’s more about doing. Starting a new year is a perfect time to set your intention on how you want to affect the world outside your personal sphere. I know I’m not alone in that while I am glad to put 2016 behind me, I’m not altogether too sure about 2017. All the more reason to have a plan about how you want things to go down. It can be overwhelming to figure out where to start. So start at the beginning: 1. FOCUS – Ask yourself what the top issue is for you – it’s overwhelming to try and solve all the world’s problems at once. Believe me, my mom and I tried over numerous cups of coffee. What is the area that you feel most concerned about protecting? Civil rights? Climate change? Women’s health? Choose one (or two, tops) and put your energies here. When we’re talking about your portfolio, diversification is beneficial. For philanthropic investments, concentrating your giving – of time and money – focuses your precious resources on the specific goal you want to support, and can enhance your involvement in something you care about. 2. Next, DECIDE how you’d like to help. There are three main ways to support the causes that matter to you: • Gifts to traditional charities • Gifts to not-for-profits with a political agenda • Gifts of action Gifts to Traditional Charities Our tax code currently provides some incentive for charitable giving, allowing a tax deduction for giving to not-for-profit – and generally non-political – groups. We’re entering a whole new world this year, both with potential changes to the tax code and changes in the political climate. We don’t yet know how the changes to the tax code will affect charitable giving from a tax perspective. One thing we can know with some certainty is that there will be less spending of our collective tax dollars for social services or human rights protection. Organizations that work in these areas – food banks, civil rights groups, women’s health – are going to need your help more than ever. If they are 501(c)3 organizations, you can take a tax deduction to the full extent of the law as it stands now. From what we have heard thus far, the new administration is proposing tax reform that stresses simplification, part of which would reduce the number of tax brackets and substantially increase the standard deduction (from $6,300 to $15,000 for single filers, $11,500 to $30,000 for jointly-filed tax returns). Meaning many people who may have itemized and received a tax benefit for charitable giving will now receive no additional tax benefit from this unless their total itemized deductions exceed the standard deduction. Gifts for Political Action There are many reasons to give beyond a tax deduction, and giving to groups that lobby or otherwise take political action may now be on an equal footing tax-wise with giving to tax-exempt organizations. Some not-for-profit groups which lobby or otherwise participate in political campaigns don’t have 501(c)(3) status, so your donation may not be tax-deductible. It’s easy to get overwhelmed by the many areas of need, and you’re...

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