THE WARREN-WATCHUNG CONNECTION PAGE 38 NOV 2023-JAN 2024 theconnectionsnj.com I am pleased to share my top tax and financial tips for 2023. The selection process was difficult given the abundance of issues created by evolving tax rules, fastpaced capital markets, and post-pandemic economic issues. The list was created by my 40 years of experience and client interactions. Interest Rates Interest rates have climbed sharply from historic lows to near-cycle highs. Cash and fixed income now has a real return. The increases in interest rates and resulting yields have created opportunities for savers and investors. Money markets now provide rates of about 5%; however, they are taxable and subject to re-investment risk. Currently, I am encouraging qualified individuals in higher tax brackets to consider using a barbell approach of short-term United States Treasury Bonds (UST) and Mid Term Municipal Bonds (Muni). Using the 1-year UST as a proxy, the yield is about 5.4%. USTs are highly liquid and are State tax exempt. On the back end of the barbell, Muni bonds can be both Federal and State tax-exempt. For example, using an effective yield of say 4%, assuming a combined tax rate of 50%, would result in a taxable equivalent yield of 8%. Duration would help manage reinvestment risk and potentially provide the opportunity for gain; in the event the Federal Reserve Bank was to eventually cut rates. Higher interest rates create the motivation to allocate a bit more of a diversified portfolio to cash and fixed income. Autos Have you tried to purchase or lease a new car recently only to receive sticker shock? Low inventory, increased prices, and higher finance rates have significantly increased the cost. When acquiring that new car, consider the increased equity in your existing vehicle, for trade-in or available fixed purchase option, if leased. Imagine helping save the planet and your wallet, via an electric vehicle (EV). Purchasers of a qualified EV are eligible for a Federal Tax Credit of up to $7,500 subject to income limitations. Further qualified EVs are exempt from NJ Sales Tax. Leasing an EV could be a smart choice in that some manufacturers will pass the federal credit, without regard to income limitations. Further, the price of EVs is expected to decline over time and the technology to advance, as such the ability to return the vehicle at lease end would be of value. Stress-Free Tax Season Shapiro CPA’s caring and experienced team guides clients to a stress-free tax season. We have provided proactive, individualized tax-management along with timely and accurate preparation for over 75 years. Our team is experienced and equipped to manage the complex needs of successful individuals and closely held businesses. Shapiro Financial Group, via our dedicated partner Raymond James Financial Raymond James Financial Services, provides financial stability along with a comprehensive array of resources and expertise. As an independent financial advisory firm, we offer a holistic approach to financial planning and wealth management. Clients have the ability to choose amongst our professional services. Those who choose to use our integrated tax and investment service have the added benefits of a single point of personal contact and the efficient and stress-free convenience of tax reporting documents which are received by our offices electronically. As a multi-disciplined professional, I enjoy providing timely and helpful information on a wide range of financial issues. As a local resident of the community, I would welcome the opportunity to help your family and business grow and prosper. Accounting services are provided solely by Shapiro CPAs Shapiro CPAs. Securities are offered through Raymond James Financial Services, Inc.- member FINRA/SIPC. FINANCIAL FORUM Top Tax Tips & Financial Findings for 2023 By Robert Shapiro CPA, ABV - Owner Shapiro CPAs Financial Advisor, Branch Manager - RJFS Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Shapiro CPAs is not a registered broker/dealer and is independent of Raymond James Financial Services. SAL’S AUTO BODYINC. Serving Your Community for 53 Years 315 HIGHWAY 22 (EAST BOUND) • GREEN BROOK HOURS: M-F 8 AM - 5:30 PM Closed on Saturdays NJ License No. 00342A www.salsautobodyinc.com info@salsautobodyinc.com Where quality repairs are no accident (732) 968-2214 • Collision Specialists • Custom Painting • Paintless Dent Repairs We work with all insurance companies for appraisals and repairs. Merry Christmas & Happy New Year!
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