Financial News and Articles with Joe Davis in Gig Harbor WA

Insights

Plan your finances for the people, causes and community you love | ThriventWhen Tax Preparer Fraud Keeps the IRS Audit Door Open Forever!!!!! You filed your return. You paid what you owed. And after three years passed, you assumed that chapter of your tax life was closed for good. But what if it never really closed at all? Under a little-known interpretation of the fraud exception to the statute of limitations, misconduct by your tax preparer—not you—can keep an IRS audit window open indefinitely. In some courts, it doesn’t matter that you never intended to cheat, never knew anything was wrong, and relied entirely on a licensed professional to get it right. This article walks through a recent case in which the IRS audited a tax return filed in the 1990s (27 years ago), asserting massive tax, penalties, and interest based solely on a preparer’s fraud. It explains why “I didn’t know” failed in Tax Court and before the U.S. Court of Appeals for the Third Circuit; how tax preparer fraud can be imputed to you, the taxpayer; and what you should be doing now to keep decades-old tax returns from coming back to life. Contact me at 360-777-6911 or email joe.davis@thrivent.com or schedule a meeting for the article and learn how to potentially avoid or minimize this pitfall. Takeaways You are legally responsible for every number on your return, even if a preparer enters the data. Under Allen and Murrin, “I didn’t know” is not a defense to the unlimited statute of limitations for fraud in Tax Court and the Third Circuit. The three‑year statute of limitations is effectively a privilege that can be lost when a return is deemed fraudulent. BASR draws a different line, limiting the fraud exception when only the preparer—not the taxpayer—intended to evade tax. This is why forum and appellate circuit selection are now central strategic decisions in fraud‑related disputes involving the statute of limitations. Until the Supreme Court resolves this conflict, taxpayers and advisors must assume that in some courts, “forever” in Section 6501(c)(1) really does mean forever. disclosures:thrivent.com/social Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional.

When you retire, you leave behind many things—the daily grind, the commute to work, and maybe even your previous home. However, one thing that will always remain is your tax bill. When you understand how investments are taxed and set strategies accordingly, you can make the right decisions that help keep income taxes in check. Will Your Taxes Affect Your Retirement? Join me for this event on Friday 30 Jan at 415pm at the Gig Harbor Library at 4424 Point Fosdick Dr, Gig Harbor, WA 98335, where you will learn strategies to work toward a lower tax bracket in retirement! There will be light refreshments. No products will be sold. Thrivent financial advisors and professionals have general knowledge of the Social Security tenets. For complete details on your situation, contact the Social Security Administration. Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional. See thrivent.com/social for important disclosures. 27878-15M R11-20

Read post

Thrivent Social Media Privacy Policy, Guidelines, Disclosures & DisclaimersWhy Serious Landlords Rely on the 1031 Exchange. If you own rental property and want to become a big-time landlord, use the Section 1031 exchange to -sell appreciated properties, pay no federal income taxes, and reinvest all proceeds; -trade up into larger or better‑performing properties, such as moving from one‑door rentals into multifamily rentals; -avoid taxes during your lifetime; and -bequeath the property at death to your heirs, who receive a step-up in basis to fair market value. Critical Step 1 To get your Section 1031 exchange on track, engage a qualified 1031 real estate exchange intermediary. You need to do this first, before starting down the sale or purchase path with your property, even though the intermediary will not start working on your case until you buy or sell. But no worries here: your intermediary will communicate what you need to do. Choose your intermediary firm with the same care you would for investing significant funds. Your tax and financial advisors likely can give you guidance Contact me at 360-777-6911 or email joe.davis@thrivent.com for additional steps. disclosures:thrivent.com/social Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional.

Thrivent Social Media Privacy Policy, Guidelines, Disclosures & DisclaimersYour 2025 Year-End Tax Planning Guide for Tax-Saving Tips! As we approach the end of 2025, there’s still time to take action and make a real difference in your tax outcome for the year. With thoughtful planning and a few strategic steps, you can reduce your tax bill, strengthen your retirement savings, and position your finances for a better 2026. Below are some year-end moves to consider before December 31. Each one is practical, IRS-approved, and designed to help you keep more of what you’ve earned. Strengthen Your Business Deductions before December 31 1. Prepay Expenses Under the IRS Safe Harbor If you’re on the cash basis, you can prepay qualifying expenses up to 12 months in advance and deduct them this year. That includes office rent, equipment leases, and insurance premiums. For example, if your monthly office rent is $3,000, prepaying $36,000 on December 31 to cover your 2026 rent gives you a $36,000 deduction in 2025—and it provides the landlord with the income when he wants it, in 2026. Be sure to mail the funds on December 31 so they arrive in January 2026, and keep documentation, such as the USPS tracking number. 2. Hold Off on Year-End Billing A simple yet effective move for cash-basis businesses: delay billing clients until January. Since you don’t recognize income until payment is received, postponing invoices can shift taxable income into 2026. 3. Purchase Needed Equipment If you’ve been planning to buy office furniture, computers, or machinery, doing it now can provide a full deduction through 100 percent bonus depreciation or Section 179 expensing—as long as you place the equipment in service before December 31. 4. Use Business Credit Cards Wisely For Schedule C filers, the deduction occurs on the date of the charge, not when you pay the bill. That means charges made in December are deductible this year. Corporations can do the same when employees are using a corporate card. 5. Document and Claim Every Legitimate Deduction Don’t avoid deductions because you think they might raise red flags. If they’re legitimate and supported by records, you’re entitled to them. If deductions exceed your income, that loss may create a net operating loss (NOL) that carries forward to offset future profits. 6. Review Qualified Improvement Property If you improved the interior of your business or one of your commercial rental properties this year, those costs may qualify for immediate expensing rather than 39-year depreciation. To take the deduction for 2025, you must place the improvement in service by December 31. disclosures:thrivent.com/social Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional.

Thrivent Social Media Privacy Policy, Guidelines, Disclosures & DisclaimersLearn How to Beat 2025 Estimated Tax Penalties Instantly, Today! Here’s an important tax planning strategy that can save you thousands in penalties if you’ve missed estimated tax payments for 2025. The Penalty Problem When you don’t make your 2025 estimated tax payments on time, the IRS charges a non-deductible 7 percent penalty that compounds daily. Because penalties are not deductible, they are considerably more costly than deductible interest. Simply writing a check today won’t erase the penalties. It only prevents them from growing further. But there is a powerful way to make them disappear entirely. The One Perfect Solution By using a retirement account with 60-day rollover provisions, you can eliminate estimated tax penalties instantly. Here’s how: • Withdraw funds from your IRA, 401(k), or other eligible plan, and direct the custodian to withhold federal income tax. • Repay the full amount into the retirement account within 60 days using other funds. The IRS treats the withheld taxes as if they were made evenly across all four estimated tax deadlines. And because you repaid the account within 60 days, the withdrawal is not taxable, and no penalty applies. Other Options and Pitfalls If you are age 73 or over, you can use withholding taxes from required minimum distributions (RMDs) to cover both your RMD and your estimated tax needs. Don’t use a W-2 bonus. It triggers payroll taxes and can reduce your Section 199A deduction—likely more costly (and perhaps far more costly) than the penalty itself. disclosures:thrivent.com/social Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional.

Thrivent Social Media Privacy Policy, Guidelines, Disclosures & DisclaimersTAX SAVINGS TIPS! OBBBA Restores and Creates New 100 Percent Deductions for You Now. If you plan to buy equipment, furniture, computers, or other personal property for your business, the recently enacted One Big Beautiful Bill Act (OBBBA) delivers great news. You can now deduct the full cost of such property in a single year—without limit. For manufacturers, the OBBBA goes even further by creating a new 100 percent deduction for factories and other production-related real estate. disclosures:thrivent.com/social Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional.

Thrivent Social Media Privacy Policy, Guidelines, Disclosures & DisclaimersDo you have a personal vehicle? Thanks to the One Big Beautiful Bill Act (OBBBA), you may be eligible for a valuable “no new cash outlay” tax deduction beginning in 2025. Here’s how it works: If you convert a personal-use vehicle to business use, the law treats it as placed in service on the conversion date. Thanks to OBBBA’s reinstatement of 100 percent bonus depreciation, you may deduct up to 100 percent of the vehicle’s fair market value—as long as you don’t opt out of bonus depreciation. For example, if your converted vehicle is worth $31,000 and you use it 70 percent for business, you could deduct $21,700 on your 2025 return. Heavy SUVs, pickups, and vans with a gross vehicle weight rating (GVWR) over 6,000 pounds qualify for full bonus depreciation. Smaller vehicles are subject to “luxury auto” limits—but even those can allow up to $20,200 in first-year deductions. A few rules to know: • You must use the lower of your vehicle’s fair market value or adjusted basis at the time of conversion to business use. • Section 179 expensing is not allowed for converted assets, but bonus depreciation is automatically applied unless you actively opt out. • All assets in the same depreciation class are treated the same for bonus depreciation—you’re in or out for the entire group. If you later sell the vehicle, your basis for calculating gains or losses changes depending on whether it’s a gain or loss. This is a powerful way to deduct the cost of an existing asset without spending new money. If you want to discuss the conversion of a personal vehicle to business use, please call me on my direct line at 360-777-6911. disclosures:thrivent.com/social Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional.

Plan your finances for the people, causes and community you love | ThriventHave you ever heard of the Mega backdoor Roth! If you are a business owner with no employees and prefer Roth-style retirement savings, you may want to consider the mega backdoor Roth strategy. This powerful tool allows you to contribute significantly more to a Roth account than the standard Roth IRA or even the regular backdoor Roth route—up to $70,000, or $77,500 if you’re age 50 or older. Compare that to the regular backdoor Roth limit of $7,000 ($8,000 with the age 50-plus catch-up), and you’ll see why the “mega” title fits. If you are self-employed, own a corporation, or are a partner in a partnership with no full-time employees, the mega backdoor Roth could be a high-impact retirement strategy. If you want to discuss the mega backdoor Roth strategy, please call me on my direct line at 360-777-6911. disclosures:thrivent.com/social

Wondering if you should add a fixed annuity to your retirement strategy? Consider these possibilities: 👉 You don’t pay taxes on your earnings until you withdraw your money, which helps your money accumulate even faster. 👉 It could supplement other sources of guaranteed income, like Social Security or a pension 👉 It could provide a stable and predictable income source to cover your essential expenses in retirement. To learn more about fixed annuities: https://bit.ly/4kBW6tN

Read post

June 2025 Market Update: Confidence reboundsThe mixed economic data of May highlighted our economy is still slowing. Read Thrivent Asset Management's thoughts on how our outlook has changed in the June market update.

There are different types of annuities, and it’s important to understand which one is right for your financial situation. For more information about annuities 👉 https://bit.ly/4jpD7Ss

Read post

We’re expanding our financial advisor teams across the country to meet growing demand for values-based financial guidance. We’re actively looking for people who want to make a meaningful impact through their work. Here’s what you can expect: ✅ Competitive training and pay ✅ Team-based culture ✅ Nationwide roles with flexible options Learn more about our exciting push for growth in this Wealth Management article: https://bit.ly/4muewP0 Discover more about the Thrivent financial advisor career: thriventcareers.com/43DUGcF

Read post

Plan your finances for the people, causes and community you love | ThriventInherited IRAs: Critical IRS Updates for 2025 If you have inherited (or may someday inherit) an individual retirement account (IRA), the 2025 changes may significantly impact your tax planning. Key Updates • RMD requirements. Starting in 2025, annual required minimum distributions (RMDs) are mandatory for most inherited IRAs. Failure to comply may result in penalties of up to 25 percent, reducible to 10 percent if corrected promptly. • 10-year rule enforcement. Non-spousal beneficiaries must fully deplete inherited IRAs within 10 years of the original owner’s death, with annual RMDs generally required. Spouses and Special Cases • Surviving spouses can assume ownership of the IRA or withdraw from it as a beneficiary. Roth IRAs offer additional flexibility, allowing for tax-free growth without RMDs. • Minor children have until age 31 to deplete the account, with the 10-year rule beginning at age 21. • Disabled beneficiaries may be exempt from the 10-year rule indefinitely. Planning Strategies Strategic withdrawals can help you avoid higher tax brackets. For example, spreading withdrawals evenly over 10 years can minimize tax impact. Timing withdrawals based on expected tax rate changes can also optimize savings. If you want to discuss inherited IRAs, please call me on my direct line at 360-777-6911. Disclosures:thrivent.com/social

May 2025 Market Update: Volatility goes up and downMixed economic data in April presents a lot of uncertainty in the economic markets. Read Thrivent Asset Management's analysis on what this means for investors in the May Market Update.

Plan your finances for the people, causes and community you love | ThriventCould a Qualified Charitable Distribution(QCD) help you meet your Required Minimum Distribution(RMD) requirement? If you have one or more traditional IRAs and are age 73 or older, you’re probably familiar with three of the most dreaded letters in the tax world: RMD, short for required minimum distribution. Starting the year, you turn 73, the IRS requires you to withdraw a certain amount from your traditional IRAs annually. This amount is based on your age and increases as you get older. RMDs are taxable income, which is precisely why many retirees dread them. But if you’re charitably inclined, there’s a powerful way to meet your RMD requirement without increasing your taxable income: the qualified charitable distribution, or QCD. With a QCD, you direct money from your IRA straight to a qualified charity. That amount counts toward your RMD for the year—but it doesn’t count as taxable income to you. Even better, you can use a QCD whether or not you itemize deductions, so you can still benefit from charitable giving on your tax return. A QCD can help you • satisfy all or part of your RMD for the year; • support the charities you care about; • avoid reporting the RMD as taxable income; and • reduce the risk of being pushed into a higher tax bracket. While RMDs don’t start until age 73, you can make QCDs when you turn 70 1/2. The annual QCD limit is generous: up to $108,000 per person per year. For married couples filing jointly, each spouse can make a QCD of up to $108,000 from their own IRA, for a combined total of $216,000 for 2025. The QCD must go to a Section 501(c)(3) charity—such as a church, school, or other non-profit organization. You cannot make QCDs to donor-advised funds or private foundations. A great choice is to have your IRA trustee transfer the QCD directly from your IRA to the charity. Also, make sure you get a written acknowledgment from the charity for your records. Make the QCD first if you plan to take multiple withdrawals from your IRA during the year. The IRS treats your first withdrawal as your RMD, so taking the QCD first help ensures it counts toward your RMD. And most important, don’t forget to let your tax preparer (us) know you made a QCD. You need to report it correctly on your tax return. If you want to discuss QCDs, please call me on my direct line at 360-777-6911. Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional. Disclosures: thrivent.com/social

I invite you to a free education event at my home catered by BBQ2U. It will be live streamed so if you are unable to attend in person please let me know so I can RSVP you to the zoom version. Please RSVP to joe.davis@thrivent.com or call 360-777-6911. Don’t Worry Retire Happy with Tom Hegna, 7 Steps to Retirement Security. If you want more control of retirement, there are seven steps you can follow. Retirement income expert Tom Hegna says it starts with having a plan. Join him for Don’t Worry, Retire Happy where he will share insights about guaranteed income, Social Security, guarding against inflation and more. • Learn how to maximize Social Security. • Protect your savings from inflation. • Secure more retirement income. Thrivent.com/disclosures. No products will be sold. Tom Hegna is not affiliated with or endorsed by Thrivent. The views expressed in this presentation by Tom Hegna are their own and not necessarily those of Thrivent or its affiliates.

Read post

Backdoor Roth IRA Conversations: Smart Move or Hidden Trap? If you’ve ever wondered how to get more money into a Roth IRA despite income limits, the backdoor Roth IRA conversion strategy may have caught your attention. It’s a smart planning tool for high-income earners—but only when used with care. First, a quick refresher: Roth IRAs offer two powerful benefits—tax-free withdrawals in retirement (if you meet certain conditions) and no required minimum distributions during your lifetime. These features make Roth IRAs excellent for retirement income planning and for long-term wealth transfer to heirs. Unfortunately, direct contributions to a Roth IRA are phased out at higher income levels—$236,000 to $246,000 for joint filers and $150,000 to $165,000 for single filers in 2025. That’s where the backdoor Roth comes in. Here’s how it works: You make a non-deductible contribution to a traditional IRA, then convert that amount into a Roth IRA. If you have no other traditional IRAs, this strategy can be a clean, tax-free move. However—and this is key—if you have other traditional IRAs (including a SEP or SIMPLE IRA), the IRS looks at all of them when determining the taxable portion of your conversion. This can result in unexpected taxable income on the conversion. In other words, what appears to be a simple “tax-free” conversion could surprise you with a tax bill if you’re not careful. Before you make a move, it’s essential to review your entire IRA picture. In some cases, consolidating or converting other IRAs first can help set the stage for more tax-efficient backdoor conversions down the line. Bottom line: A backdoor Roth IRA conversion can be a powerful tool, but it’s not a one-size-fits-all solution. If you want to discuss the backdoor Roth IRA, please call me on my direct line at 360-777-6911. Disclosures: Thrivent .com/social

Read post

Financial advice with purpose | ThriventIf you have inherited (or may someday inherit) an individual retirement account (IRA), the 2025 changes may significantly impact your tax planning. Key Updates • RMD requirements. Starting in 2025, annual required minimum distributions (RMDs) are mandatory for most inherited IRAs. Failure to comply may result in penalties of up to 25 percent, reducible to 10 percent if corrected promptly. • 10-year rule enforcement. Non-spousal beneficiaries must fully deplete inherited IRAs within 10 years of the original owner’s death, with annual RMDs generally required. Spouses and Special Cases • Surviving spouses can assume ownership of the IRA or withdraw from it as a beneficiary. Roth IRAs offer additional flexibility, allowing for tax-free growth without RMDs. • Minor children have until age 31 to deplete the account, with the 10-year rule beginning at age 21. • Disabled beneficiaries may be exempt from the 10-year rule indefinitely. Planning Strategies Strategic withdrawals can help you avoid higher tax brackets. For example, spreading withdrawals evenly over 10 years can minimize tax impact. Timing withdrawals based on expected tax rate changes can also optimize savings. If you want to discuss inherited IRAs, please call me on my direct line at 360-777-6911. Disclosure: Thrivent.com/social

As tax season approaches, here’s your reminder to get started ahead of time. Here are four reasons to file early: ✅ Faster tax refunds ✅ Extra time to make a payment if you owe ✅ Reduce risk of someone else pocketing your refund ✅ Avoid tax deadline stress or having to file an extension See thrivent.com/social for important disclosures.

Read post

You can start retirement planning at any age. And you don't have to do it alone. Together, let's review your financial goals and priorities to ensure you are on the right track for your future.

Read post