Accredited WealthManagementSteve Giacobbe, CFA, CFP®6010 Brownsboro Park Blvd.Louisville, KY 40207502-290-1905sgiacobbe@accreditedwm.comwww.accreditedwm.com

June 2018

Managing Money When You Marry: Financial Tipsfor Newlyweds

Marriage and Money: Taking a Team Approach toRetirement

As a business owner, what should I know aboutusing temporary workers?

Can I convert my traditional IRA to a Roth IRA in2018?

Thank You For the Referrals!Celebrating 4 Years of IndependenceMid-Year Planning: Tax Changes to Factor In

See disclaimer on final page

We want to sincerely thank all of oursupporters for their referrals of friends andfamily to AWM. We really appreciate it! In ourfirst four years, we have enjoyed a great amountof growth and now manage close to $50 millionin assets for clients in six states. In fact, over90% of our growth has been a result ofreferrals from clients and supporters, pleasekeep them coming!

Here are a few reasons that may signal aneed for our services:

1. Unhappy with their current advisor

2. Concerned about retirement income

3. Nearing retirement

4. Changing jobs

5. Sudden wealth (inheritance)

6. Recent divorce

7. New to Louisville

Our supporters have confidence knowing theyare referring to an experienced andaccomplished investment team that serves asa fiduciary and will always act in the bestinterest of their clients.

If you know someone that could benefit from ourservices, give us a call to set up an introduction.

The Tax Cuts and Jobs Act,passed in December of lastyear, fundamentallychanges the federal taxlandscape for bothindividuals and businesses.Many of the provisions in thelegislation are permanent,others (including most of the

tax cuts that apply to individuals) expire at theend of 2025. Here are some of the significantchanges you should factor in to any mid-yeartax planning. You should also considerreviewing your situation with a tax professional.

New lower marginal income tax ratesIn 2018, there remain seven marginal incometax brackets, but most of the rates havedropped from last year. The new rates are 10%,12%, 22%, 24%, 32%, 35%, and 37%. Most,but not all, will benefit to some degree from thelower rates. For example, all other things beingequal, those filing as single with taxableincomes between approximately $157,000 and$400,000 may actually end up paying tax at ahigher top marginal rate than they would havelast year. Consider how the new rates will affectyou based on your filing status and estimatedtaxable income.

Higher standard deduction amountsStandard deduction amounts are nearly doublewhat they were last year, but personalexemptions (the amount, $4,050 in 2017, thatyou could deduct for yourself, and potentiallyyour spouse and your dependents) are nolonger available. Additional standard deductionamounts allowed for the elderly and the blindremain available for those who qualify. If you'resingle or married without children, the increasein the standard deduction more than makes upfor the loss of personal exemption deductions.If you're a family of four or more, though, themath doesn't work out in your favor.

Itemized deductions — good and badThe overall limit on itemized deductions thatapplied to higher-income taxpayers is repealed,the income threshold for deducting medicalexpenses is reduced for 2018, and the income

limitations on charitable deductions are eased.That's the good news. The bad news is that thededuction for personal casualty and theft lossesis eliminated, except for casualty lossessuffered in a federal disaster area, andmiscellaneous itemized deductions that wouldbe subject to the 2% AGI threshold, includingtax-preparation expenses and unreimbursedemployee business expenses, are no longerdeductible. Other deductions affected include:

• State and local taxes — Individuals are onlyable to claim an itemized deduction of up to$10,000 ($5,000 if married filing a separatereturn) for state and local property taxes andstate and local income taxes (or sales taxesin lieu of income).

• Home mortgage interest deduction —Individuals can deduct mortgage interest onno more than $750,000 ($375,000 for marriedindividuals filing separately) of qualifyingmortgage debt. For mortgage debt incurredprior to December 16, 2017, the prior $1million limit will continue to apply. Nodeduction is allowed for interest on homeequity loans or lines of credit unless the debtis used to buy, build or substantially improvea principal residence or a second home.

Other important changes• Child tax credit — The credit has been

doubled to $2,000 per qualifying child,refundability has been expanded, and thecredit will now be available to many whodidn't qualify in the past based on income;there's also a new nonrefundable $500 creditfor dependents who aren't qualified childrenfor purposes of the credit.

• Alternative minimum tax (AMT) — The TaxCuts and Jobs Act significantly narrowed thereach of the AMT by increasing AMTexemption amounts and dramaticallyincreasing the income threshold at which theexemptions begin to phase out.

• Roth conversion recharacterizations — In apermanent change that starts this year, Rothconversions can't be "undone" byrecharacterizing the conversion as atraditional IRA contribution by the return duedate.

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Managing Money When You Marry: Financial Tips for NewlywedsGetting married is an exciting time for a couple.However, along with this excitement comemany challenges. One such challenge is how tomanage your finances together. The key tosuccess is to communicate with your partnerand come up with a financial plan that you bothagree on, since the financial decisions youmake now can have a lasting impact on yourfinances in the future.

Map out your financial future togetherYour first step should be to discuss yourcommon financial goals. Where do you seeyourself next year? What about five years fromnow? Together, make a list of your short- andlong-term financial goals. Short-term goals areones that can be achieved in less than fiveyears (e.g., saving for a down payment on ahome or new car). Long-term goals usually takemore than five years to achieve (e.g., paying offcollege loans, saving for retirement). Next,determine which financial goals are mostimportant to both of you so together you canfocus your energy on them.

Prepare a budgetA budget is an important part of managing yourfinances. Knowing exactly how you arespending your money each month can set youon a more clear path to pursue your financialgoals. Start by listing your current monthlyincome. In addition to your regular salary andwages, be sure to include other types ofincome, such as dividends and interest. Next,add up all of your expenses. It helps to divideexpenses into two categories: fixed (e.g.,housing, food, transportation, student loanpayments) and discretionary (e.g.,entertainment, vacations). Ideally, you shouldbe spending less than you earn. If not, youneed to review your expenses and look forways to cut down on your spending.

Consider combining bank accountsYou'll also need to decide whether you andyour spouse should combine bank accounts orkeep them separate. While maintaining a jointaccount does have its advantages (e.g., easierrecord keeping and lower maintenance fees), itis sometimes difficult to keep track of the flow ofmoney when two individuals have access to asingle account. Fortunately, online bankingmakes it easier to know exactly what is in youraccount at all times. If you choose to keepseparate accounts, you might consider openinga joint checking account to pay for commonhousehold expenses.

Resolve outstanding credit/debt issuesHaving good credit is an important part of anysound financial plan, so this would be a goodtime to identify any potential credit or debtproblems you or your spouse may have and tryto resolve them now rather than later. Ordercopies of your credit reports and review themtogether. You are entitled to a free copy of yourcredit report from each of the three major creditreporting agencies once every 12 months (visitannualcreditreport.com for more information).For the most part, you are not responsible foryour spouse's past credit problems, but theycan prevent you from getting credit together asa married couple. Even if you've always hadgood credit, you may be turned down for creditcards or loans that you apply for together if yourspouse has a bad credit history. As a result, ifone of you had credit issues, you mightconsider keeping your credit separate until yourcredit situation improves.

Evaluate your employee and retirementbenefitsIf you and your spouse have separate healthinsurance coverage through an employer, you'llwant to do a cost-benefit analysis of each planto determine whether you should keep yourhealth coverage separate. Compare eachplan's deductible, copayment, and benefits aswell as the premium for one family plan againstthe cost of two single plans. In addition, if youand your spouse participate in anemployer-sponsored retirement plan, youshould be aware of each plan's investmentoptions, matching contributions, and loanprovisions. Review each plan carefully anddetermine which one provides the betterbenefits. If you can afford to, contribute themaximum amount possible to your respectiveplans.

Assess your life and disabilityinsurance needsWhile the need for life and disability insurancemay not have seemed necessary when youwere both single, as a married couple you mayfind that you are financially dependent on eachother. Having life and disability plans in placewill help ensure that your financial needs will betaken care of if either of you dies or becomesdisabled. If you already have insurance, youshould reevaluate the adequacy of yourcoverage and update your beneficiarydesignations.1 "Stress in America," American PsychologicalAssociation, 2017

According to a survey bythe American PsychologicalAssociation, 62% ofAmericans are stressedabout money.1

The cost and availability oflife insurance depend onfactors such as age, health,and the type and amount ofinsurance purchased.

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Marriage and Money: Taking a Team Approach to RetirementNow that it's fairly common for families to havetwo wage earners, many husbands and wivesare accumulating assets in separateemployer-sponsored retirement accounts. In2018, the maximum employee contribution to a401(k) or 403(b) plan is $18,500 ($24,500 forthose age 50 and older), and employers oftenmatch contributions up to a set percentage ofsalary.

But even when most of a married couple'sretirement assets reside in different accounts,it's still possible to craft a unified retirementstrategy. To make it work, open communicationand teamwork are especially important when itcomes to saving and investing for retirement.

Retirement for twoTax-deferred retirement accounts such as401(k)s, 403(b)s, and IRAs can only be held inone person's name, although a spouse istypically listed as the beneficiary who wouldautomatically inherit the account upon theoriginal owner's death. Taxable investmentaccounts, on the other hand, may be heldjointly.

Owning and managing separate portfoliosallows each spouse to choose investmentsbased on his or her individual risk tolerance.Some couples may prefer to maintain a highlevel of independence for this reason,especially if one spouse is more comfortablewith market volatility than the other.

However, sharing plan information andcoordinating investments might help somefamilies build more wealth over time. Forexample, one spouse's workplace plan mayoffer a broader selection of investment options,or the offerings in one plan might be somewhatlimited. With a joint strategy, both spousesagree on an appropriate asset allocation fortheir combined savings, and their contributionsare invested in a way that takes advantage ofeach plan's strengths while avoiding anyweaknesses.

Asset allocation is a method to help manageinvestment risk; it does not guarantee a profit orprotect against loss.

Spousal IRA opportunityIt can be difficult for a stay-at-home parent whois taking time out of the workforce, or anyone

who isn't an active participant in anemployer-sponsored plan, to keep his or herretirement savings on track. Fortunately, aworking spouse can contribute up to $5,500 tohis or her own IRA and up to $5,500 more to aspouse's IRA (in 2018), as long as the couple'scombined income exceeds both contributionsand they file a joint tax return. An additional$1,000 catch-up contribution can be made foreach spouse who is age 50 or older. All otherIRA eligibility rules must be met.

Contributing to the IRA of a nonworking spouseoffers married couples a chance to double upon retirement savings and might also provide alarger tax deduction than contributing to asingle IRA. For married couples filing jointly, theability to deduct contributions to the IRA of anactive participant in an employer-sponsoredplan is phased out if their modified adjustedgross income (MAGI) is between $101,000 and$121,000 (in 2018). There are higher phaseoutlimits when the contribution is being made tothe IRA of a nonparticipating spouse: MAGIbetween $189,000 and $199,000 (in 2018).

Thus, some participants in workplace planswho earn too much to deduct an IRAcontribution for themselves may be able tomake a deductible IRA contribution to theaccount of a nonparticipating spouse. You canmake IRA contributions for the 2018 tax year upuntil April 15, 2019.

Withdrawals from tax-deferred retirement plansare taxed as ordinary income and may besubject to a 10% federal income tax penalty ifwithdrawn prior to age 59½, with certainexceptions as outlined by the IRS.

Open communication andteamwork are especiallyimportant when it comes tosaving and investing forretirement.

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Accredited WealthManagementSteve Giacobbe, CFA, CFP®6010 Brownsboro Park Blvd.Louisville, KY 40207502-290-1905sgiacobbe@accreditedwm.comwww.accreditedwm.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018

IMPORTANT DISCLOSURES

Accredited Wealth Managementprovides this information for educationalpurposes only; it is not intended to bespecific to any individual's personalcircumstances.

To the extent that this materialconcerns tax matters, it is not intendedor written to be used, and cannot beused, by a taxpayer for the purpose ofavoiding penalties that may be imposedby law. Each taxpayer should seekindependent advice from a taxprofessional based on his or herindividual circumstances. To the extentthat this material concerns legalmatters, individuals should consult theappropriate legal counsel given theirparticular situation.

These materials are provided forgeneral information and educationalpurposes based upon publicly availableinformation from sources believed to bereliable—we cannot assure the accuracyor completeness of these materials.The information in these materials maychange at any time and without notice.

Can I convert my traditional IRA to a Roth IRA in 2018?If you've been thinking aboutconverting your traditional IRAto a Roth IRA, this year maybe an appropriate time to doso. Because federal income

tax rates were reduced by the Tax Cuts andJobs Act passed in December 2017, convertingyour IRA may now be "cheaper" than in pastyears.

Anyone can convert a traditional IRA to a RothIRA in 2018. There are no income limits orrestrictions based on tax filing status. Yougenerally have to include the amount youconvert in your gross income for the year ofconversion, but any nondeductible contributionsyou've made to your traditional IRA won't betaxed when you convert. (You can also convertSEP IRAs, and SIMPLE IRAs that are at leasttwo years old, to Roth IRAs.)

Converting is easy. You simply notify yourexisting IRA provider that you want to convertall or part of your traditional IRA to a Roth IRA,and they'll provide you with the necessarypaperwork to complete. You can also transferor roll your traditional IRA assets over to a newIRA provider and complete the conversionthere.

If you prefer, you can instead contact thetrustee/custodian of your traditional IRA, havethe funds in your traditional IRA distributed toyou, and then roll those funds over to your newRoth IRA within 60 days of the distribution. Theincome tax consequences are the sameregardless of the method you choose.1

The conversion rules can also be used tocontribute to a Roth IRA in 2018 if you wouldn'totherwise be able to make a regular annualcontribution because of the income limits. (In2018, you can't contribute to a Roth IRA if youearn $199,000 or more and are married filingjointly, or if you're single and earn $135,000 ormore.) You can simply make a nondeductiblecontribution to a traditional IRA and thenconvert that traditional IRA to a Roth IRA.(Keep in mind, however, that you'll need toaggregate the value of all your traditional IRAswhen you calculate the tax on the conversion.)You can contribute up to $5,500 to all IRAscombined in 2018, or $6,500 if you're 50 orolder.1 If you choose to receive the funds first and don'ttransfer the entire amount, a 10% early withdrawalpenalty may apply to amounts not converted.

As a business owner, what should I know about usingtemporary workers?If you're planning to ramp upyour temporary staff thissummer, here are a few thingsto know.

Generally, temporary work is any work that isnot intended to be permanent or long term.Temporary work can be full- or part-time. Useof temporary workers (sometimes referred to astemps) may provide you with some flexibility tohandle employee absences due to illness,vacation, or maternity leave. They may alsohelp you handle special projects, busy times, orseasonal work.

Temporary workers can be hired directly orthrough a temporary employment agency.Temporary workers you hire directly, even ifpart-time, are generally treated the same asfull-time workers and may be entitled toemployee benefits through you. For example, aworker who completes 1,000 hours of service ina year may be eligible to participate in yourretirement plan.

On the other hand, a temporary employee hiredthrough a temp agency works for the agency,not for you. The employment agency is

generally responsible for the temporaryemployee's benefits, if any. The hourly wagerate you pay to the agency may be higher as aresult.

The temp agency can save you time and effortby finding and screening potential employeesso that you don't have to. The agency mayhave a pool of workers available at any timeand at a moment's notice. The screening, inparticular, may be worth the extra cost in thecurrent tight job market.

However, you may need to break in or train atemporary employee each time you get onefrom the employment agency. To minimize this,you may request that the employment agencysend a temporary employee who has alreadyworked for you before.

Sometimes a temporary employee maybecome a permanent employee. If an employeewas hired through a temporary employmentagency, depending on your contract with theemployment agency, you may need to pay afee to the agency if you permanently hire thetemporary employee.

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