Broker Check

Syntegra Private Wealth Group

We work with a broad range of clients to provide comprehensive financial planning, while bringing cooperation, synergy and integrity to every client relationship.

Tax & Investment Update - Sep, 2021

We’ve heard from many of you asking about proposed legislative changes that may affect your financial and tax plans.  In general, we are anticipating the potential for higher tax rates for higher income earners.  This may affect both ordinary and capital gain income.  We are also anticipating the possibility of some changes to how assets are taxed at death – either by death becoming a “realization event” for tax purposes or potentially the elimination of the basis “step up”.  By no means are any of these proposals a certainty, however, we are aware of the suggested changes and the potential impact on some of you. 

For some, we may recommend accelerating income through Roth conversions and gain harvesting to take advantage of the lower current ordinary income and capital gains rates.  For others, we may seek to defer income via more advanced income strategies.  Many may not be affected directly by new tax legislation so no action would be necessary.  As always, these recommendations and decisions are highly personal and depend on your unique situation.  As we continue to monitor the potential legislation, we will be in touch once we have a clearer picture of the changes and their impact.  We have the ability to sort through the clients that may be affected by legislative action and we would be in direct contact with you should anything come through.

In the meantime, here are a couple of whitepapers on the topic.  Also, please find a brief excerpt from TRowe Price, one of the financial firms providing regular input to our portfolio management.  We are well aligned with this manner of management.

Below you will find some key insights taken directly from the TRowe Price 6-30-21 Semi-Annual Report:

  • “The U.S. will likely run north of $6 trillion in deficits in FY20–FY21—$4 trillion more than was previously projected—due to stimulus payments, enhanced unemployment benefits, and payments to businesses impacted by COVID. These deficits are projected to remain elevated over the next couple of years as well. In the very short term, this has resulted in something that has never occurred in the past: a U.S. economy that is likely to be larger in 2021–2022 than it would have been if we had never had the pandemic.”
  • “It has been a long time since we have seen elevated inflation in this country and this concern is causing people to ask whether it is temporary or something more sustainable. The most likely scenario is that inflation rates will come down in 2022 and 2023.”
  • “We continue to go where the market gives us fat pitches and are informed by valuation, sentiment, and our five-year forward internal rate of return estimates. Often these fat pitches occur when a company, sector, or a type of investing falls out of favor because it is out of step with the current macroeconomic consensus. This is one of the most powerful inefficiencies in the market and it is an inefficiency that only seems to grow as the market becomes more and more short-term-focused.”
  • “Interest rates rose during the first half and this caused losses in traditional fixed income investments. Our fixed income investments rose in value as we hold primarily high-quality high yield and leveraged loans with very low duration, which should do well if rates increase.”
  • “These last 18 months have seen a tug of war for market leadership between the most speculative, expensive part of the growth universe on the one hand and deep-value, low-quality companies on the other. Capital Appreciation historically plays in the center of the market in areas such as growth at a reasonable price (GARP), utilities, and other high-quality names that deliver not only strong absolute returns but exceptional risk-adjusted returns.”
  • “So, what are we doing to navigate this environment? In a speculative market like this, we are trying to keep up as best as we can but at the same time limit downside risk and protect our shareholders if this speculative excess ends. This means owning stocks that have attractive five-year internal rates of return but also limited downside risk.”

Securities America and its representatives do not provide tax advice; therefore it is important to coordinate with your tax advisor regarding your specific situation.

 

Whitepapers
Forbes 2021 Best-In-State

Forbes 2021 Best-In-State

Please join the Syntegra team in congratulating our founding partners, Tom Burke & Jeff Fiehler, on being included in the 2021 Forbes Best-In-State Wealth Advisors Ranking!

Forbes Best-In-State - Burke

Forbes Best-In-State - Fiehler


Forbes Best-In-State Wealth Advisors

The Forbes ranking of Best-In-State, developed by SHOOK Research, is based on an algorithm of qualitative and quantitative data, rating thousands of wealth advisors with a minimum of seven years of experience and weighing factors like revenue trends, assets under management, compliance records, industry experience and best practices learned through telephone and in-person interviews. Data is provided by the advisor and is not verified by Securities America. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Past performance is not an indication of future results.

Requirements to qualify include: seven years as an advisor; minimum of one year at current firm, with exceptions (acquisitions, etc.); advisor must be recommended, and nominated, by their firm; completion of an online survey; over 50% of revenue/production must be with individuals; and an acceptable compliance record. Quantitative factors that are reviewed include: revenue/production, with weightings assigned for each; assets under management (and the quality of those assets) both custodied and a scrutinized look at assets held away; client-related data, such as retention; portfolio performance is not a factor as audited returns among advisors are rare and differing client objectives provide varying returns. Qualitative factors that are reviewed are telephone and in-person meetings with advisors; compliance records and U-4s; advisors providing a full client experience that includes their service model, investing process, fee structure, and breadth of services; credentials; use of team and team dynamics; community involvement; and discussions with management, peers and competing peers.

American Rescue Plan Update

Congress has passed the latest phase of COVID-19 stimulus called the American Rescue Plan of 2021 and the President signed it into law on March 11, 2021.  This wide-ranging and expansive bill includes several relevant components, outlined below.

Recovery Rebates (i.e. stimulus checks)

The current legislation includes a third round of stimulus checks to be sent out to eligible Americans.  These are similar to prior checks but have a number of substantial differences.

  • The amount is $1,400 per eligible individual.
  • Eligible individuals include adult taxpayers and their dependents. This includes minor children, most adult children under 24 still enrolled in school, and any potential adult dependents you claim as such on your tax return. For example, a married couple with 2 minor children would be eligible for $5,600 ($1,400 x 4).
  • Income phase-outs for eligibility are based on income tax filing status and Adjusted Gross Income (AGI) and are shown below. Income below the lower limit will receive the full amount, income above the higher limit will receive nothing and income between the limits will receive partial checks.
    • Individual: $75,000-$80,000
    • Head of Household: $112,500-$120,000
    • Married Filing Jointly: $150,000-160,000
  • Eligibility will be determined based on the most recently filed tax return (i.e. 2019 or 2020). If you earned too much in those years to be eligible but your income drops for 2021 and you do become eligible, you can claim the credit on your 2021 tax return.
  • If your AGI in 2019 makes you eligible, but your AGI from 2020 will push you over the above thresholds, you should delay filing your 2020 return until the stimulus payment is received.
  • If you receive a stimulus check and your 2021 (or 2020 if you have not filed yet) income is over the thresholds, there is no “clawback” of these funds. In other words, if you receive the funds, you get to keep them.
  • These checks are an advanced payment of a 2021 tax credit. Therefore, the amount is not considered taxable income.

Enhanced Child Tax Credits

The American Rescue Plan includes an expanded Child Tax Credit (CTC) for 2021.

  • Taxpayers are now eligible for an increased CTC amount of $3,000 (up from $2,000) for qualifying children. That amount is increased further to $3,600 for children under the age of six.
  • This increase does come with an income phaseout, however. The excess credit is reduced by $50 for each $1,000 in income that exceeds the following thresholds:
    • Individual: $75,000
    • Head of Household: $112,500
    • Married filing Jointly: $150,000
  • The “normal” child tax credit amount of $2,000 per child keeps the existing phase-out ranges of AGI of $200,000 for individuals and $400,000 for married filers. Therefore, even if you phase out of the extra credit amount, you may still be eligible for the “normal” credit amount.
  • If eligible, this “extra” credit amount is to be paid in advance installments from July-December 2021. Therefore, rather than simply claiming it on your 2021 tax return, you will be getting periodic payments from the IRS to get the cash into your hands earlier.

Expanded Child and Dependent Care Tax Credit

  • Prior to this legislation, taxpayers calculated their Child and Dependent Care Tax Credit using a maximum of $3,000 of expenses for one qualifying child and $6,000 for two or more children. The new legislation more than doubles the qualifying amount of eligible expenses on which the credit is calculated to $8,000 for one child and $16,000 for two or more children.
  • This credit begins to phase out for taxpayers with AGI exceeding $400,000.

Unemployment Compensation

  • The enhanced Federal unemployment compensation benefits of an extra $300 per week have been extended through early September 2021. This includes the Pandemic Unemployment Assistance (PUA) program for which self-employed individuals are eligible.
  • 2020 unemployment compensation of up to $10,200 per individual will be considered tax-free for federal purposes so long as the taxpayer’s AGI is under $150,000. Note that this is a retroactive change for 2020 and may require amending your tax return; if this applies to your situation and you have already filed for 2020, you should consider amending.

Other Items of Note

  • Premium Tax Credits (for health insurance purchased through the exchange) have also been expanded to higher income taxpayers. Additional provisions extend more generous benefits to anyone who has been laid off for any period of time. Please reach out to your advisor to discuss if applicable.
  • The legislation also includes COBRA subsidies for employees involuntarily terminated from employment. Employers are eligible to receive a payroll tax credit for covering 100% of this cost from April to September 2021.

We will continue to monitor relevant legislation and provide you with updates if and when they occur.  As always, please reach out to our team if you have questions and we would be happy to meet and discuss.

At the Crossroads of Synergy & Integrity

We are excited to share that Syntegra Private Wealth Group was featured in St. Louis Financial, Fortune, Entrepreneur and Bloomberg Businessweek. The article highlights Tom Burke, CEO and President, Jeff Fiehler. In addition the article features what we do here at Syntegra Private Wealth Group and how we serve you. As this piece is about Syntegra we would be remiss if we didn't realize the important role you, our clients and friends play in making our team one of the best. Take a look at the article below!

As Seen In Fortune, Entrepreneur & Bloomberg Businessweek

Why you should choose us?

  • Built on a foundation of over 125 years combined experience in the financial planning industry.
  • We are a TEAM! You can rely on the advisors and supporting team members to provide the best possible advice and service, with the goal of enabling you to achieve your financial goals and dreams with peace of mind.
  • We are consistently ranked in various lists (Intra-company, Barron’s, Financial Times, Forbes) as top advisors in the industry*
  • You have the right to a financial analysis, plan and outlook WITHOUT extra fees.
  • *The CPAs on our team and the highly competent attorneys we work with will take a close look at your plans the first time at no additional cost to you. Together, we will create a synergistic plan for you.
  • We have well-thought-out diversification, accumulation and distribution strategies to help you achieve the lifestyle goals you have in mind for yourself.
  • We are here for YOU, we care about YOU and we have YOUR BEST INTEREST at heart. We operate with integrity, always.


* Securities America and its representatives do not provide tax advice.

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