Armstrong Financial Strategies
Morris Armstrong founded Armstrong Financial Strategies in 2001 as fee-only firm. The firm does not accept commissions or referral fees and the only source of its income is from the client. Morris has taught at Marymount College in Tarrytown, NY and has written extensively on the subject of investments, taxes and planning for Multex Investors, which Reuters purchased in 2003.
Morris has also been active in the field of divorce planning, and in 2008, the Connecticut Law Tribune recognized his efforts. The lawyers in the state voted him as one of the top three planning firms in the state.
Morris has written for and been quoted in numerous publications including the Wall Street Journal, New York Times, Financial Planning magazine, Wealth Manager Magazine and Yahoo Finance. His investment philosophy has been shaped by both John Bogle and Eugene Fama, and is his portfolios, which are a blend of passive and active vehicles, reflect this.
While he enjoys divorce planning, it can be draining and he prefers not to work with those couples who believe that “War of the Roses” was a manual for divorce. He enjoys his role as an Enrolled Agent helping people resolve their issues with the IRS, whether it is a notice or something more involved such as an audit or offer in compromise.
BBA, Banking, Pace University
Assets Under Management:
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I know from personal experience the issues that you are facing and it was my own divorce which led me to focus on divorce issues in both my planning and divorce practices. I do hope that your divorce is cordial and does not get nasty. Sometimes in the process, it is helpful if you have someone in the mental health arena to help with the emotional anguish that often accompanies the end of a marriage.
What do I ask clients to bring to an initial consult? Nothing - just themselves and to tell me what they are going through and what do they want to accomplish. You will also be asked if there are any nuptial documents in place. If it is a good fit, at subsequent meetings you will be asked for copies of tax returns and lists of assets and liabilities. Much of what will be given to attorneys for the discovery will also be what I require. You will be expected to provide a budget - what do you need to live on. The copier machine will become your friend - you will need 3 years of tax returns, at least 6 months of brokerage statements, bank statements. You will need copies of your spouse's retirement plan and work related benefits.
The "best" settlement is going to be determined by your lawyer, his lawyer and the judge. What I can do, is make sure that you understand the impact of the settlement and how it will impact you. The advisor should be the one to work with you and your lawyer and if needed, handle much of the non-legal paperwork. If you develop a nice working relationship with the advisor then they can continue post-divorce.
Again, the initial consult is really just a getting to know each other meeting and there is no need to have much documentation. Always remember though, once engaged, you need to be 100 percent up-front with everything.
I am sorry for what you are going through, but life does go on - stay strong and healthy.
You should always keep in mind that on the federal level, a certain amount of your income is exempt. This is the sum of your personal exemption and your standard deduction. A couple over 65 years old will have the first $23,200 dollars of taxable income exempt. The 10 percent bracket would allow you to add about $18,450 to that number. A Roth distribution does not have any impact on that number, nor does any return of capital from an annuity or other investment.
In the 10% and 15% brackets, qualified dividends, and capital gains are not subject to tax but are included in the AGI calculation. I would suggest that each year you plan ahead and determine what level of taxation is comfortable for you and keep within that limit. Keep in mind that if you are married, when you or your spouse pass away, the following year, the tax brackets will shrink dramatically and the surviving spouse may be forced into a higher bracket.
It seems to me that you do like to plan ahead and good luck!
I am making the bold assumption that you are asking this as an individual, and not as a business owner. The short answer, as an individual, is none with the exception of the amounts that you may be charged when you use a debit or credit card to pay your taxes. That is the 2 or 3 percent fee imposed by the accepting agency for allowing that payment. In order to deduct it, you must itemize your return and it would be added to all of the miscellaneous expenses that are subject to a 2 percent threshold. This means that if your adjusted gross income is $50,000 and you have $1,050 dollars eligible miscellaneous expenses, you may get the tax benefit on $50.
You may not deduct annual fees, late charges, or interest paid if you are a consumer.
If you are a business, then you may be able to deduct these charges.
Good news, life insurance proceeds paid as a death benefit are generally exempt from income tax. There are very few instances where it is taxable and those tend to be business related.
The second part of the question is the answer that you don't want to hear, and even that may not be possible. You have a few choices. Make your grandson your sole beneficiary of the ROTH and upon your death, he can take it out all at once or over time tax-free. I suspect that you are aware of that.
During your lifetime, and provided he has earned income, you could provide him with money to fund a Roth IRA. That would be limited to the tax laws in effect at the time and his overall contributions to retirement plans.
You cannot change ownership of a Roth during your lifetime. Likely not what you want to hear, but I hope that you find it helpful.