Financial Alternatives, Inc.

What will a Fed rate cut mean for the economy? The markets?

Weak July Jobs Report Signals Steep September Rate Cut: What the Experts Are Saying A marked slowdown in hiring and rising unemployment means the Fed might have to make steep cuts to interest rates soon.

Coming out of 2021-2022’s historical high inflation, investors are concerned about inflation and its long-term impact. Here are a few common questions from our clients.

Inflation and Investing: what happens when the two shall meet? — Financial Alternatives

For those of you flustered by high mortgage rates, here's a perspective you may appreciate.

Mortgage Forecast: Will Rates Go Down in 2024? Mortgage interest rates are expected to decline gradually in 2024, but most economists don't expect the 30-year fixed rate to fall below 6% until 2025, according to a U.S. News analysis.

Does bias impact your financial decisions?

How Psychological Biases Can Impact Investment Decisions Investing is a complex and challenging endeavor, influenced not only by market dynamics and economic factors but also by the intricate workings of the human mind.

Understanding how the change to the CA SDI wage cap works will help you prepare for a possible reduction to your take-home pay.

This is also an opportunity to consider the risk of injury and how a longer-term disability would affect your financial goals.

https://www.financialalternatives.com/financial-alternatives-inc/ca-sdi

The Feds are working on coming up with ways to protect consumers from AI scams. But until they do, it's best to be aware and take caution to avoid being a victim.

AI Fuels New, Frighteningly Effective Scams The technology can help criminals impersonate celebs, law enforcement — or even you

Elder abuse is a huge issue, not just in California. Read up on how to protect your loved ones.

What You Need to Know About Preventing Elder Abuse in La Jolla, CA — Financial Alternatives It is a sad fact of life that often those who are close to us are the ones who have the ability to hurt us the most, even trusted caregivers or family members. Members of the La Jolla community may recall the chilling case of Robert Stella, an elderly man who was tied to his bed, starved, and forced

California residents should consider these choices wisely, as housing costs are huge.

10 most expensive places to retire in the U.S. based on home prices—over half are in California When deciding where to retire, housing costs can be important to consider. Here are the most expensive places to retire in the U.S. by home price.

Apologies in advance to anyone who previously has allowed me to soapbox on how annoying the penny is and how each new president’s first executive order should be removing pennies from circulation.
https://www.financialalternatives.com/financial-alternatives-inc/pennies

Organizing tax documents is the last thing you probably want to do after you file your return. See our list to learn how long you need to hold on to tax documentation.

The #1 Thing You’d Never Think to do During Tax Season (But Should) — Financial Alternatives The last thing on your mind during tax season is getting your financial documentation in order– but maybe it should be. If you’re brave enough to take a crack at it, here are some guidelines to follow.

We often hear from our clients that they wish the process of making tax payments could be simpler. Here are some of our suggestions for simplifying and improving this process.

Quarterly tax payments: essential tips to know! — Financial Alternatives With tax season upon us, many individuals and small business owners will soon be filing their taxes for the 2023 income year. Some will find, perhaps unexpectedly, that they are required to make 2024 quarterly tax payments due to not having enough withheld the prior year via an automatic withholding

Presidential elections have a way of creating angst and anxiety. This happens every four years and we always have many conversations with clients of all political persuasions about what, if anything, they should change in their portfolios due to the upcoming election.

Market volatility in an election year: how to cope with angst about your portfolio — Financial Alternatives Presidential elections have a way of creating angst and anxiety. This happens every four years and we always have many conversations with clients of all political persuasions about what, if anything, they should change in their portfolios due to the upcoming election.

Thanks to the Corporate Transparency Act of 2021, business owners need to file Beneficial Ownership Information (BOI) Reports starting January 1, 2024.

Small Business Owner? Get clear on who’s going to handle a new BOI required filing for 2024 — Financial Alternatives Thanks to the Corporate Transparency Act of 2021, business owners need to file Beneficial Ownership Information (BOI) Reports starting January 1, 2024. 

Many California Homeowners have received a non-renewal notice from their homeowner’s insurance carriers. The insurance companies are pulling back coverage because of high wildfire risk, high inflation and legal changes.

California Homeowner’s Insurance crisis - What should you do? — Financial Alternatives Does the California homeowners’ insurance crisis have any hope?

As of January 2024, the marginal tax rate on wages in California will be 14.4%.

State Tax Changes Taking Effect January 1, 2024 Thirty-four states will ring in the new year with notable tax changes, including 15 states cutting individual or corporate income taxes (and some cutting both).

Starting this year, SDI tax won't be capped anymore. This may make private disability insurance a better deal for highly compensated employees.

Reminder: SDI wage base eliminated starting in 2024 - Spidell Effective January 1, 2024, the state disability insurance (SDI) tax (currently set at 1.1% for 2024) will apply to an employee’s total wages rather than being capped at a specified amount. (UIC §985) For 2023, the maximum wage base that the tax could be applied to was set at $153,164. Elimination...

As we reconnect and share stories with loved ones it may have become evident that many of us are living longer and more prosperous lives than our predecessors. Something we may not have considered as we gather for meals and parties however is this:

Long Term Care: who is going to take care of me when I get old? — Financial Alternatives Whether you are young or old, it’s crucial that all of us get familiar with what Long-Term Care involves, what it could cost you, and the resources available to you. 

Instead of matching contributions, IBM employees will now get credits in the Defined Benefit plan. Other companies are likely to follow suit. Here's what this means for employees:

How IBM Reopened Its DB Plan to Replace 401(k) Contributions | Russell Investments Our director and co-head of strategic asset allocation digs into IBM's groundbreaking announcement on changes to its retirement benefits program and assesses the potential impacts on plan participants and the DB plan industry at large.

Even if you don’t have student loans, please use this information to help your friends, children, or grandchildren.

Student loan payments – your options after reinstatement — Financial Alternatives Even if you don’t have student loans, please use this information to help your friends, children, or grandchildren.

While we are big advocates of 529 plans, there are some questions it is useful to ask before considering funding one for your child.

529 Plan Pros and Cons | 529 Plan FAQs | Educational Savings Pans | The American College of Trust and Estate Counsel Estate experts answer parents' and families' questions about how 529 Plans work and what you need to keep in mind when saving for higher education.

Californians - got a tax complaint? California has now established a Taxpayer Advocate to help you resolve disputes.

https://www.ftb.ca.gov/help/disagree-or-resolve-an-issue/taxpayer-advocate-services.html

Should you also be worried? It’s helpful to look at what has happened to the stock market during past shutdowns.

Government Shutdowns and Their Historical Effect on the Stock Market — Financial Alternatives

Are you thinking about filing for Social Security benefits and/or Medicare? Here are some helpful points to help you do a self-check to ensure your application process goes smoothly, so that you can avoid hiccups, and maximize your benefits.

What to know before you file for Social Security & Medicare — Financial Alternatives Are you thinking about filing for Social Security benefits and/or Medicare? Here are some helpful points to help you do a self-check to ensure your application process goes smoothly, so that you can avoid hiccups, and maximize your benefits.

Key point: There are errors in medical bills more than you realize.

Navigating medical bills: Take these 12 steps to manage costs and minimize debt Unexpected medical bills can be expensive. Sometimes, they're unavoidable. But you may avoid paying more than you have to by asking the right questions.

Look before you leap!

More unmarried couples are buying homes together. What to know before you do Unmarried first-time homebuyers make up a large portion of the market for the first time. While they are making it possible, there are a few things to consider.

Did you know that under certain circumstances, Social Security can pay benefits to the parent of a deceased worker? Read the article below to learn more about what people commonly miss regarding Social Security benefits.

5 Facts You Might Not Know About Social Security | SSA Most people know at least something about Social Security. For decades, Social Security has been providing valuable information and tools to help you build financial security. Here’s your opportunity…

After completing post-childhood support goals of funding an education, wedding, or travel expense, being able to help a child purchase their first home is frequently a goal of our clients. For many families, it brings a sense of satisfaction in setting up their children up to achieve their own life goals.

However, when done without the proper planning, it has the potential to create family and financial tension.

https://www.financialalternatives.com/financial-alternatives-inc/2023/7/31/helping-children-buy-a-home

“How will income from my children’s accounts be treated for taxes?”

It depends on how much income was realized over the course of the year, if they have earned income from work, and whether “Kiddie Tax” comes into play.

While we are not tax experts and cannot give specific tax advice, we do want to explore this topic and explain what Kiddie Tax is so that others can be more aware of how a minor’s passive income is taxed and the options available for filing (or not filing) tax returns on their behalf.

What is Kiddie Tax?
Kiddie tax is a special tax provision that applies to minors and dependents who have passive income from capital gains, dividends, interest, and other sources. It applies to dependent children 18 or younger and full-time student dependents younger than 24. Kiddie tax states that for these individuals, income derived from unearned sources is taxed at the following rates for 2022 / 2023:

The first $1,150 is not taxed (via the standard deduction).

The next $1,150 is taxed at the child’s tax rates.

Anything above $2,300 is taxed at the parent’s marginal tax rate.

Note: The calculation if a dependent has earned income is more complex as they can elect either the $1,150 standard deduction or the amount of earned income + $400 as their standard deduction (up to $13,850 for 2023 as a single standard deduction).

The idea behind the Kiddie Tax was to deter parents from shifting assets to their children for the sole purpose of taking advantage of their children’s low tax brackets. The rule instead reapplies the parent’s marginal rate to any child’s unearned income above the $2,300 threshold each year.

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Heads up on student loan repayments resuming.

Biden admin will resume interest on federal student loans Sept. 1; monthly payments due in October The difference of a few days when it comes to interest accrual on the massive federal student loan portfolio amounts to hundreds of millions of dollars for borrowers.