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December 2016

What You Can & Cannot Control as You Plan for Retirement

Some things you have no influence over. You may have some power to affect other factors.

Provided by Sierra Financial Advisors, LLC

Are you worried about retiring? Many baby boomers are, and they have reason to be, given low interest rates, subpar returns on equities, increasing health care costs, and the issues facing Social Security. Now, do yourself a favor. Read that last sentence again, and ask yourself, “which of those four things can I control?” The correct answer: none of them. That may be frightening, but it is also truthful. As you plan for retirement, you must acknowledge that certain factors are beyond your control. As much as you would like to influence or change them, you have no say over them. So, what can you control? Primarily, three things: the way you save; the way you manage risk; and the way you will spend your savings. The way you save may be more important than the way you invest. Every saver hears about the benefits of an early start, and those benefits can be considerable. As an example, consider these hypothetical savers: Erica saves $5,000 per year for 20 years at an 8% return, and thanks to time, inflows, and compounding, she turns that initial $5,000 into $247,115 two decades later. Midway through this 20-year stretch, Giovanni, Erica’s co-worker, decides he will start saving too. Time is not such a good friend to him, however. If he wants to amass $247,115 (give or take a few bucks), he will have to pour in around $15,795 into his retirement account annually at that 8% yearly yield. And as for Erica … all other variables frozen, if she saves $14,000 per year, instead of $5,000 a year, at a consistent 8% yield for 20 years, her savings at the end of that two-decade period will be $691,921 rather than $247,115.1 This is a hypothetical example used for illustrative purposes only, and does not represent the return of any specific investment. Investment returns fluctuate and there is no assurance that a single rate of return will be sustained over an extended period of time. Actual rates of return will vary over time, particularly for long-term investments. Investments are subject to market risks including the potential loss of principal invested. Your risk exposure matters. In a perfect world, taking on X degree of risk would lead to Y degree of reward. If only it worked that way. Still, a portfolio that assumes reasonable levels of risk may generate better long-term returns than a highly conservative, risk-averse one. The inescapable truth of investing is that when you forfeit risk, you also often forfeit your potential for significant gains. To be more specific, getting out of equities when the market sours puts you on the sidelines when the market rallies. Should you abandon equities in a correction or bear market, you face another kind of risk – the risk of selling low and buying high. If you absolutely detest risk and want to minimize your risk exposure as you save and invest for retirement, then you must compensate for that lessened risk exposure by saving more, whether in cash or conservative investment vehicles. Remember that to save more, you must also spend less. Will you plan how to spend your retirement savings? That will put you a step ahead of many retirees, who have no strategy whatsoever. You need to plan both the succession and amount of your retirement withdrawals – what annual percentage should be distributed from what accounts in what order.

What You Can & Cannot Control as You Plan for Retirement...Cont.

Four primary variables may affect your plan, and you arguably have some control over them all: your yearly withdrawal amount, your level of debt, your health, and your retirement date. You cannot control the tax code or the equities markets, but you can try to pay off debt, improve your health, spend reasonably, and work longer, if needed. Focus on what you can control. It may keep you from losing some sleep over what you cannot.

For more information, please call Katie Coombs or Sally Kaplan with Sierra Financial Advisors, LLC at (775) 885-8847.

Securities offered through 1st Global Capital Corp., Member FINRA/SIPC. Investment advisory services offered through 1st Global Advisors, Inc. Insurance Services offered through Sierra Insurance Advisors, LLC. Sierra Insurance Advisors, LLC is not affiliated with 1st Global Capital Corporation. This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Citations.1 - bankrate.com/finance/investing/saving-money-or-investing-more-important-over-time.aspx [12/30/15]

Important Changes to the Due Date Requirements for Filing Your Annual Information Returns

Provided by KBCA, LLC

The IRS has changed the due date requirements for all information returns for W-2’s and 1099’s. In past years, W-2’s and 1099’s were to be issued to the recipient by January 31 and then filed with the IRS or Social Security Administration by February 28th when paper filing or March 31st when electronically filed. The new due date is January 31st for everything. Should you need an extension for the filing deadline, you may be granted 30 days if you request it in writing before the initial deadline. This new requirement happened with the expectation of limiting fraud by having the information in the system by the time individuals are filing for tax refunds

The Most Common 1099’s:

1. Form 1099-MISC, Miscellaneous Income File this form for each person your business paid during the year:

• at least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest;• at least $600 in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish, or, generally, the cash paid from a notional principal contract to an individual, partnership, or estate;• any fishing boat proceeds, • gross proceeds of $600, or more paid to an attorney during the year, or

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Important Year-End Reminders

Provided by KBCA, LLCAdjustments to Federal Withholding

If you face a penalty for underpayment of federal estimated tax, you may be able to eliminate or reduce the penalty by increasing your withholding by amending your Form W-4. You should especially review your withholding to ensure that enough tax is withheld if you hold multiple jobs, you and your spouse both work, or you can be claimed as dependent by another person. If you become married or single in 2016, have added or removed a dependent, or expect increased deductible itemized deductions, you should provide your employer with an updated Form W-4 that reflects the new filing status or changed exemptions.

If it looks like you are going to owe income taxes for 2016, consider bumping up the federal income taxes withheld from your paychecks now through the end of the year.

If you are self-employed and on payroll, consider taking a bonus at year-end and calculating any withholding needed given your overall tax situation.

Review Your Portfolio Investments

Before year-end, review your securities portfolio for any poorly performing investments that could be sold at a loss to offset other capital gains you have recognized this year. If you have no other capital gains during the year, you can still consider selling poorly performing investments to receive the $3,000 capital loss benefit. Keep in mind that any capital loss carryovers you have may already accomplish this, and any additional net capital losses over $3,000 are carried forward to future years.

IRA Contributions

In 2016, the maximum contribution an individual may make to a Roth or Traditional IRA is $5,500. This limit is increased by $1,000 if you are 50 or older by the end of 2016. Your Traditional IRA contributions may be tax-deductible, and your Roth IRA contributions may be limited depending on your Adjusted Gross Income (AGI) for 2016.

Health Savings Accounts (HSA)

In 2016, the maximum contribution an individual may make to an HSA is $3,350 for an individual with self-only coverage and $6,750 for an individual with family coverage. These limits are increased by $1,000 if you are 55 or older by the end of 2016. Contributions can be made up until the date you file your tax return or April 15, 2017, whichever comes first.

HSA earnings accumulate tax-free and may be carried over from year-to-year. Only distributions used to pay qualified medical expenses are tax-free.

Depreciation Limits

The maximum amount allowed as a Section 179 depreciation deduction has been permanently set at $500,000. For 2016, businesses exceeding a total of $2,010,000 of qualifying asset purchases have the Section 179 depreciation deduction phased out dollar-for-dollar until it is completely eliminated above $2,510,000. The phase out limits will now be adjusted yearly for inflation. For 2016, the bonus depreciation deduction remains at 50% on qualifying asset purchases. This 50% deduction applies to qualified purchases through December 31, 2017, and afterwards begins to be phased out over 2 years. To qualify for bonus depreciation, the asset must be new.

There are also many other considerations and options that can be used in year-end planning. Please contact your advisor with KBCA, LLC at (775) 885-8847 if you have any questions about these options and the possible tax benefits to your specific situation.

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Circular 230 Disclaimer: To ensure compliance with Treasury Regulations governing written tax advice, please be advised that any tax advice included in this communication, including any attachments, is not intended, and cannot be used, for the purpose of (i) avoiding any federal tax penalty or (ii) promoting, marketing or recommending any transaction or matter to another person. KBCA, LLC is not affiliated with 1st Global Capital Corp.

Important Changes to the Due Date Requirements for Filing Your Annual Information Returns ... cont.

• withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

Corporations are not issued 1099’s except for attorneys - if the attorney is a corporation then you must issue a 1099 Form.

Limited Liability Companies (LLC’s) – are not considered a corporation and should be issued a 1099 Form.

2. Form 1099-INT, Interest Income File this form for each person you have paid during the year:

• at least $600 in interest paid during the course of business

You must furnish all information returns to the recipients AND the Internal Revenue Service (for 1099’s) and Social Security Administration (for W-2’s) by January 31, 2017.

Please contact our office if you need us to prepare your 2016 1099 forms or have questions on the filing requirements.

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Effective for taxable years starting on or after January 1, 2016, the due dates of certain business returns have changed. For calendar year taxpayers, the due dates are as follows:

Return Type Due Dates Under Prior Law Due Dates Under New Law

Partnership April 15 Extension: September 15

March 15 Extension: September 15

C Corpora�on March 15

Extension: September 15 April 15

Extension: September 15

S Corpora�on March 15 Extension: September 15

March 15 Extension: September 15

Trust and Estate April 15

Extension: September 15 April 15

Extension: September 30

Foreign Bank and Financial Accounts Report

June 30 Extension: None

April 15 Extension: October 15

For fiscal year end C Corporations, the due dates are as follows:

Return Type Due Dates Under Prior Law Due Dates Under New Law

C Corpora�on (June 30th year- end)

September 15 Extension: March 15

September 15 Extension: April 15

C Corpora�on (all other fiscal year-ends)

15th day of 3rd month a�er year- end

Extension: 15th day of the 9th month a�er year-end

15th day of the 4th month a�er year-end

Extension: 15th day of the 10th month a�er year-end

Tax Return Due Date Changes