IN THE KNOW
Monthly Newsletter
February 2021
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In this month's newsletter, we have an article that discusses tax planning and possible changes to tax laws. We have another article that gives you some great tips on stimulus payments and your tax return. We are continuing our employee spotlight and introducing you to partner & advisor, Vanessa McElwrath. As usual, we are sharing helpful COVID-19 resources from our parent company, Maxwell, Locke & Ritter, and relevant investment articles and videos from Dimensional. We hope you have emerged from last week's massive storm with minimal damages! We have included a new section to the newsletter that has resources that may be helpful.
We are a firm that understands that managing your assets is about more than money. It is about empowering your future. At ML&R Wealth Management, we focus on you.
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When it comes to taxes, nobody wants to pay more than what they owe; however, without careful tax planning, this is exactly what can happen. Effective tax planning helps ensure that you are paying your fair share of taxes, and not a penny more.
Possible Changes to Tax Laws
Since we recently had a change in political leadership, both in the White House and Congress (where Democrats regained a narrow majority), there is even more uncertainty than usual around tax law, and what changes could be in the works. Though laws may change that could impact your taxes, it is still important to do as much tax planning as possible. Our approach at ML&R Wealth Management is to plan within the current tax laws about which we know. We would rather revise the planning for our clients later if things change, rather than react or speculate, and make changes that could prove costly later. Before we explore specific tax planning tips, let’s look at potential tax law changes under consideration.
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Did you receive a stimulus payment in 2020, or are you wondering if you should have? Perhaps you’re curious about how your stimulus payment will affect, or be affected by, your 2020 tax return. Maybe you had a significant change in income this past year, due to unemployment or waived RMDs, and would like to understand if you are eligible to claim a check from the IRS. There’s a lot of information circulating regarding this topic, and we’re here to help you sort through it.
Who was eligible to receive stimulus payments?
The CARES Act, passed in March of 2020, was a $2.2 trillion economic stimulus bill in response to the economic challenges resulting from the COVID-19 pandemic. The act provided emergency relief to various segments of the economy, setting aside approximately $293 billion for individuals in the form of direct payments[i].
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Employee Spotlight
We are excited to spotlight Vanessa McElwrath this month! Below are some fun facts to help you get to know her better! |
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Birthday: May 21
Tell us about your family: My husband Mac and I have been married for almost 9 years. We met in college at UT and dated for 6 years before making it official. He works in real estate development and co-founded Wayfinder Real Estate in 2019. We have two boys, McCammon (3 yrs) and Holden (8 mos). McCammon is funny, clever, and strong-willed. Holden is smiley, giggly, and go-with-the-flow. Rounding out our family is our yellow lab, Boone.
Favorite Restaurant? When I am feeling fancy, I love Jeffrey's...but you can usually find me at Matt's El Rancho :)
Favorite Book? It's impossible to name just one but my top 5 includes 100 Years of Solitude, Catcher in the Rye, Pachinko, A Little Life, and Gentleman in Moscow. The characters in these books were hard to say goodbye to.
Favorite Family Tradition? Cape Cod is our go-to beach vacation every year. My husband grew up going every summer, and it's been something we've continued with our own children. Our week there is usually filled with lobster rolls, "chowdah", ferry trips to Nantucket and Martha's Vineyard, and bike rides along the Shining Sea Bikeway. It's pure bliss for us.
Where do you find inspiration? My clients! I am lucky enough to work with amazing individuals and organizations that are doing incredible things to better our community, country, and the world at large.
What is your favorite part of working at ML&R? I pinch myself when I think about the team I am lucky enough to work with here at ML&R. They're not colleagues or friends but truly a family. We are here to support each other through all of life's twists and turns- personal and professional.
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Financial Wellness Q&A
In this section, we will address common personal finance questions. Email wealth@mlrpc.com if you have a question you would like answered.
Question: I have been working from home since the start of COVID-19, can I use the home office tax deduction and write off home office expenses?
Answer: You can only qualify to use the home office tax deduction if you are self-employed. If you work for an employer and receive a W-2, you cannot deduct home office expenses from your taxes. If you are self-employed, you use a portion of your home exclusively for business, and your home is the principal place of business, you may be able to claim the deduction.
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You only live once! Social media investors have banded together on unconventional platforms to drive up the prices of a handful of “meme stocks,” seemingly without traditional evaluation of investing risks and rewards. They made headlines with their “short squeeze” of GameStop (GME), and, as they garner media attention, their tactics continue. While it’s not the intended victim of the YOLO traders, will the efficient market hypothesis be a casualty of these events? The answer depends a lot on your definition of efficient markets. Perhaps long-term investors would be better served questioning the potential impact on their investment philosophy.
GameStop has been front and center in the financial news on account of the stock’s significant price volatility over a few weeks. And that has put it top of mind for many clients, as we’ve been fielding questions on how GameStop’s volatility was handled in our portfolios. This incident serves as an opportunity to highlight how Dimensional’s investment process is built to handle developments within markets, given that many of our portfolios held GameStop in January. GameStop’s rise and fall in price was extreme, to be sure. But our process is built to react systematically to the changes in stock prices that happen every day.
It’s easy to view the stories of market speculation that have dominated the news recently as cautionary tales for individual investors. But we can also look at the current moment as an opportunity to welcome a new group of investors to the market: those who have been drawn in by all the high-stakes action, and yet may want a consistent, long-term investment solution that doesn’t keep them up at night. This is probably a good time to mention that investing and gambling are not the same thing.
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Helpful Winter Storm Uri Resources
Below are some resources we've gathered to help during Austin's most recent winter storm.
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As the novel coronavirus (COVID-19) continues to spread in the U.S. and across the world, our priority at Maxwell Locke & Ritter is the safety and well-being of our people, clients, families, and community. We are monitoring daily updates and recommendations from the CDC. Additionally, we are minimizing the impact that COVID-19 could have on our services and are staying abreast of all filing deadline adjustments. We understand that in this time of uncertainty you may have growing concerns for the financial health of yourselves and your businesses, employees and families. We have curated some helpful resources for you and will continue to update this page as new information and updates occur.
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Subscribe to our 401(k) Plan Services Quarterly Newsletter |
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Are you responsible for administering your company's 401(k) plan?
Would you like more insight and resources regarding the retirement plan services industry?
If so, please subscribe to our 401(k) Plan Services Quarterly Newsletter. You can check out the last few issues below.
See our latest Retirement Plan Services articles:
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What's Happening in Austin Next Month |
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About ML&R Wealth Management: |
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At ML&R Wealth Management, we take investing personally. Your ML&R Wealth Management advisor will work to develop a lasting relationship with you, keeping in touch to understand your changing goals and to provide an asset management strategy to help achieve them. Whenever you need sound financial advice, you have a direct line to a trusted advisor.
For over 20 years, we have served individuals, families, businesses, and nonprofits with wealth management services, custom retirement and 401(k) plans, and portfolio management.
We believe in accountability and transparency and operate as a fee-only advisor with fees calculated solely on assets under management.
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