The Lowry Letter®

Week of 11/18/2019

We have a few IRS-related items in this week’s letter (including in Ask the Joes®) and hope you find them helpful. Tax revenues hit an all-time high during the most recent fiscal year, but spending continues to increase.

We learned: that the IRS has increased contribution limits for most retirement plans. We have included a few of the most common plan limits below. This means that many of you should update your payroll deferrals to take advantage of the increase.

We think: we should pay more attention to sleep. Research continues to indicate that sleep fills an important role in fitness, neurological health, and psychological welfare. Sleep quality is important, as is duration, especially with how wired we all are in the current environment. The better decision-making that comes from adequate rest is certainly important in our financial lives.

We read: that the state of Ohio has backed the winner of the U.S. presidential election in each of the last 14 races (1964-2016). These are interesting historical patterns, and we will hear many of them over the next year. As with most backward-looking patterns, they are not predictive. Still, expect to hear this repeated in your evening news.

We've been: looking forward to the release of the new streaming service Disney+ for many reasons, but especially the new Star Wars TV show, The Mandalorian. We’ve only seen one episode, but so far so good!

We recommend: these wise words from Brad McMillan: Don't invest based on headlines.

Q: I just got a letter from the IRS that says that I owe more taxes because of a rollover. This is a little scary- how should I respond?

A: First- don’t panic. Many letters from the IRS are seeking additional information that a taxpayer may have overlooked. This includes providing the cost basis of a security that was sold. So, the first action you take should be to gather the information.

Second- In the case of an IRA rollover, the IRS will be looking for proof that money was properly sent within the 60-day timeframe allowed. For most rollovers, this can be avoided by sending money directly from one retirement account to another, through a trustee-to-trustee transfer. Sometimes, especially with bank IRAs, this option is not available.

If you used a CPA, to file your taxes, contact them to handle your response. They will respond on your behalf and in a way that should be most effective. If you did not use a CPA, please reach out to us and we can help review what has been requested.

Advisory Services offered through Lowry Financial Advisors, Inc., a Registered Investment Adviser. Securities and additional advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Advisory services offered through Lowry Financial Advisors, Inc, are separate and unrelated to Commonwealth. Lowry Financial Advisors, Inc. is located at 12921 SW 1st Rd, Suite 215, Tioga, FL 32669. 352-333-7990

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