Commonly overlooked tax savings

Finances

Tax season is upon us, but before you file, take the time to be sure that you're not paying more than you owe. Melinda Kibler, CFP, EA, and portfolio manager of Palisades Hudson Financial Group, explains how keeping these three factors in mind can help you save.

Charitable Contributions
You already know that you can deduct donations of money or goods, but according to Kibler, most taxpayers often don't deduct enough. That's because many of us fail to keep detailed records tracking our donations throughout the year. "Whether you dropped off a bag of clothing at a local charity or donated $5 at the register of your grocery store, you should be tracking all of these contributions to ensure that you get the highest tax benefit," says Kibler. If you didn't track this last year, sit down now and do your best to account for as much as possible. And don't forget, you can also include transportation costs in service to a charitable organization (like dropping off those donations or getting to and from a charity event or volunteer day). Then pay closer attention to donations this year.

Reinvested Dividends
"Reinvested dividends in a taxable investment account are treated as current income, the same as though you received them in cash," says Kibler. Qualified dividends, which are those held for a specific time, are taxed at a lower capital-gains tax rate (visit irs.gov to find out what qualifies a dividend). This isn't exactly a deduction, but you can cut down on your tax bill through good record keeping. When reinvesting dividends, add this amount to your basis in the security. "By tracking the basis, you can reduce your capital-gains tax if you sell the security at a higher price," says Kibler.

Investment Fees
You can deduct the fees paid to your investment manager, in excess of 2 percent of your adjusted gross income (for example, if you make $80,000 a year, you can deduct fees over $1,600). However, you must subtract any investment management fees related to tax-exempt income, advises Kibler. If you have a portfolio of mixed assets, she adds, this is typically done on a prorated basis. If you have only investment management fees related to your retirement accounts, Kibler recommends that your manager not debit your account for their fees but instead that you write a check to the manager from your bank account. "This allows the retirement asset to continue to grow uninterrupted and allows the taxpayer a deduction—a double benefit," she says.

Any information regarding taxation contained herein is based on our understanding of current tax law. The tax and legislative information may be subject to change and different interpretations. We recommend that you seek professional legal advice for applicability to your personal situation.

About Athene Careers 888-266-8489 Individuals Professionals Institutions
Institutions
The institutional channel includes reinsurance and group annuity contracts related to pension risk transfers.
Reinsurance Pension Risk Transfer (PRT)
Investors
Privacy Legal

Annuities contain features, exclusions and limitations that vary by state. For a full explanation of an annuity, please refer to the Certificate of Disclosure or Prospectus (as applicable) and contact your Financial Professional or the company for costs and complete details.

This material is a general description intended for general public use. Athene Annuity and Life Company (61689), headquartered in West Des Moines, Iowa, and issuing annuities in 49 states (excluding NY) and D.C., and Athene Annuity & Life Assurance Company of New York (68039), headquartered in Pearl River, NY, and issuing annuities in New York, are not undertaking to provide investment advice for any individual or in any individual situation, and therefore nothing in this should be read as investment advice. This material should not be interpreted as a recommendation by Athene Annuity and Life Company or Athene Securities, LLC. Please reach out to your financial professional if you have any questions about Athene products or their features.

The term “financial professional” is not intended to imply engagement in an advisory business with compensation unrelated to sales. Financial professionals will be paid a commission on the sale of an Athene annuity.

ATHENE ANNUITIES ARE PRODUCTS OF THE INSURANCE INDUSTRY AND NOT GUARANTEED BY ANY BANK NOR INSURED BY FDIC OR NCUA/NCUSIF. MAY LOSE VALUE. NO BANK/CREDIT UNION GUARANTEE. NOT A DEPOSIT. NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY. MAY ONLY BE OFFERED BY A LICENSED INSURANCE AGENT.