'Tis the Season for Taxes?
A guide to year-end financial planning
PR Newswire, Cincinnati, December 15, 2016
As 2016 draws to a close, an estimated one in three Americans will make a New Year’s resolution related to their finances.
To support year-end planning success, Fifth Third Private Bank (NASDAQ: FITB) recently released digital guides with strategies for individuals and families to consider in preparation for tax season. Among the strategies, Fifth Third experts recommend reducing taxable income, maximizing investment opportunities and strategically planning for charitable giving.
'Tis the season for taxes? @FifthThird experts say financial talk during the holidays isn't taboo. Tweet
1. Reduce taxable income
In order to offset taxable income, the most important strategy for investors to consider is tax-loss selling and taking advantage of underwater securities.
“Selling stocks, bonds or mutual funds that have lost value should be a priority this time of year,” said Jeff Korzenik, chief investment strategist for Fifth Third. “When done in conjunction with rebalancing a portfolio, investors can minimize the tax consequences and impact.”
Additionally, Korzenik suggests taking interest rates into account throughout the planning process. Gradual interest rate increases are being monitored for next year, which are typically associated with the latter half of an economic expansion. With this in mind, investors should expect lower returns from the bonds portion of a portfolio and be more selective in their equity investments as they plan for next year.
2. Maximize investment opportunities
To wrap up 2016, Melissa Register, senior wealth planner for Fifth Third Private Bank, recommends being selective in investment decisions. By working with a wealth management advisor, you can ensure that your allocation aligns with your goals and time horizon for both your taxable and tax-deferred accounts. From this checkpoint, you can identify necessary adjustments.
“Investors can plan ahead by rebalancing portfolios and diversifying their investments before the close of the year,” said Register. “There are significant growth opportunities for 2017 in alternative investments and selective international exposure.”
3. Plan for charitable giving during the holidays
When it comes to charitable giving, Glen Johnson, managing director of Mirador Family Wealth Advisors, suggests engaging family members in the decision-making process.
“More than half of charitable giving is done in one month of the entire year: December,” said Johnson. “Holiday gatherings are an opportune time for families to set joint year-end goals and develop a strategy for allocating philanthropic donations in 2017.”
Johnson also suggests using assets that have appreciated in value as gifts for charitable donations to avoid capital gains. “People often don’t think about real estate, collectibles or art as potential gifts, which could ultimately fund a new program or service for a charity,” said Johnson.
For more information on tax planning and other tips, or to identify a Fifth Third Private Bank advisor to assist with your year-end tax planning, visit www.53.com/wealth-management.
About Fifth Third Bank
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. As of September 30, 2016, the Company had $143 billion in assets and operates 1,191 full-service Banking Centers, including 94 Bank Mart® locations, most open seven days a week, inside select grocery stores and 2,497 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, and Wealth & Asset Management. Fifth Third also has an 18.3% interest in Vantiv Holding, LLC. Fifth Third is among the largest money managers in the Midwest and, as of September 30, 2016, had $314 billion in assets under care, of which it managed $27 billion for individuals, corporations and not-for-profit organizations. Investor information and press releases can be viewed at www.53.com. Fifth Third’s common stock is traded on the NASDAQ® Global Select Market under the symbol “FITB.” Fifth Third Bank was established in 1858. Member FDIC, Equal Housing Lender.
This information is intended for education purposes only and does not constitute the rendering of tax or legal advice. Fifth Third does not provide tax or legal advice. Please contact your tax advisor or attorney for advice pertinent to your personal situation.
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