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Every year about 140 million households file their federal tax returns. For many, the process involves digging through shoe boxes or manila folders full of receipts; gathering mortgage, retirement, and investment account statements; and relying on computer software (or better yet, your Eagle Wealth tax team) to take advantage of every tax break the code permits.1
It seems a shame not to make the most of all that effort.
Tax preparation is the only time of year many households gather all their financial information in one place. That makes it a perfect time to take stock of your personal finances.
- Budget — If you have a budget in place, now is the time to review and revise it, looking at patterns in your spending. If not, consider creating one. It’ll help you allocate resources wisely.
- Insurance Checkup — Review your insurance coverage, including health, life, and property insurance. Ensure that your coverage aligns with your current needs and circumstances.
- Savings and Investments — Assess your savings and investment accounts. Are you contributing enough to your retirement accounts? Consider increasing your contributions to take advantage of tax-advantaged savings and investment opportunities.
- Debt Repayment Strategy — If you’re receiving a tax refund, consider allocating a portion of it to debt repayment. Prioritize high-interest debts first to minimize interest payments over time.
- Emergency Fund Boost — If your emergency fund is lacking, consider allocating a portion of your tax refund to bolster it. A robust emergency fund acts as a financial safety net, providing peace of mind and protecting your budget from unforeseen circumstances.
- Future Planning — Use this time to think about your long-term financial goals. If they have shifted, please reach out and let us know. We’re happy to talk things through and update your financial plan if appropriate.
Although most people don’t look forward to tax time, it’s possible to find opportunity in it. You have a chance to give your personal finances a thorough checkup and hopefully set yourself up for success the rest of the year.
As always, let us know if you have any questions or if we can help.
Until next week,
Your Eagle Wealth Team
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Important Information for Business Owners
The new year means new regulations, and there's one in particular we'd like to bring to the attention of business owners - the Beneficial Owner Information (BOI) reporting requirement.
Surprisingly, it isn’t being talked about much, even though the penalty for non-compliance is up to $500 per day.
We won't get into all the details as this is outside our field of work, but we want to give you a heads-up so you can take the right steps.
***This regulation only applies to current/future business owners, or individuals with "substantial control" over a business.***
What is this new regulation?
In 2021, Congress enacted the Corporate Transparency Act in an attempt to curb illicit finance.
The act requires companies to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury
Note - This does not involve the Internal Revenue Service or state tax reporting agencies and is not included in your annual income tax files.
Who is a Beneficial Owner?
Beneficial Owner is defined as any individual who: 1) directly or indirectly exercises ‘substantial control’ over the reporting company, or 2) directly or indirectly owns or controls 25% or more of the ‘ownership interests’ of the reporting company.
Who has to report?
A corporation, limited liability company (LLC) or other entity that requires registering with the Secretary of State (DBA, etc).
This will impact most businesses mentioned above and will potentially include multiple individuals involved in the business.
When do businesses have to report?
If you currently own (or are potentially involved in) the business types above, then the business has until 1/1/2025 to file a report.
If you start, or potentially become involved in a new business of the types mentioned above during 2024, then the reporting must take place within 90 days.
Although it’s there’s not an annual reporting requirement, any updates or changes must be reported within 30 days.
What if I don’t report?
There are severe consequences that can be assessed for noncompliance, including a penalty up to $500 per day.
Where can I learn more?
The reporting can be done directly on the FinCEN website at www.fincen.gov/boi. The website also contains more information. FinCEN can be contacted at 800-767-2825.
***Please understand that you are responsible for this filing. Eagle Wealth will not be involved in this reporting.***
We urge you to visit the FinCEN website, learn more, stay in compliance, and stay current when changes take place.
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The Week on Wall Street
Stocks fell last week as investors reacted to disappointing inflation updates and other economic reports that fell short of estimates.
Stocks Snap Winning Streak
Markets were quiet Monday but opened lower Tuesday in response to the January inflation report that showed higher-than-expected consumer prices. But stocks regained some momentum on Wednesday and rallied Thursday despite disappointing reports on both retail sales and industrial production for January.2,3
News of higher-than-expected wholesale prices on Friday put investors back on edge and kept stocks from ending the week on a positive note. The weekly loss broke a five-week winning streak.4
Inflated Perspective
Consumer Price Index data was one of the big pieces of news driving markets last week, with January’s numbers coming in at 3.1 percent compared to a year prior—cooler than December's 3.4 percent year-over-year gain but warmer than the 2.9 percent consensus. Jittery Investors focused on the hotter-than-expected part.5
With the consumer report closely followed by disappointing inflation news on the producer level, attention quickly shifted to the Fed and what’s next for interest rates. While the Fed has indicated short-term rates may trend lower in 2024, the January inflation reports support Fed Chair Powell’s recent comments that the Fed is in no hurry to cut rates.5
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Any companies mentioned are for informational purposes only, and this should not be considered a solicitation for the purchase or sale of their securities. Any investment should be consistent with your objectives, time frame, and risk tolerance.
Source: YCharts.com, February 17, 2024. Weekly performance is measured from Monday, February 12, to Friday, February 16.
ROC 5 = the rate of change in the index for the previous 5 trading days.
TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.
Treasury note yield is expressed in basis points.
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1. IRS.gov, 2023
2. The Wall Street Journal, February 13, 2024.
3. CNBC, February 16, 2024.
4. The Wall Street Journal, February 15, 2024.
5. The Wall Street Journal, February 13, 2024.
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Please consult your financial professional for additional information.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.
