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A Year-End Financial Planning Checklist

As 2019 draws to a close, it’s time to begin organizing your finances for the new year. To help you get started, we’ve put together a list of key planning topics to consider.

Savings and Investments
Revisit your retirement contributions. Review how much you’re contributing to your workplace retirement account. If you’re not taking full advantage of your employer’s match, it’s a great time to consider increasing your contribution. If you’ve already maxed out your match or your employer doesn’t offer one, boosting your contribution could still offer tax advantages. Now is also a good time to ensure that your portfolio allocation remains in line with your objectives.

Take stock of your goals. Did you set savings goals for 2019? Realistically evaluate how you did, and think about your goals for next year. If you determine that you are off track, we’d be happy to help you develop and monitor a financial plan.

Health and Wellness
Spend your flexible spending account (FSA) dollars. If you have an FSA, those funds may be forfeited if you don’t use them by year-end. (Some FSAs offer a 2.5-month grace period or the ability to carry over up to $500 into the next year; check with your employer to see if those options are available.) It’s also a good time to calculate your FSA allotment for next year, based on your current account excess or deficit.

If you’re not using an FSA, evaluate your qualifying health care costs to see if establishing one for 2020 would make sense.

Taxes, Taxes, Taxes
Manage your marginal tax rate. If you’re on the threshold of a tax bracket, deferring income or accelerating deductions may help you reduce your tax exposure. It might make sense to defer some of your income to 2020 if doing so will put you in a lower tax bracket. Accelerating deductions, such as medical expenses or charitable contributions, into the current tax year (rather than paying for deductible items in 2020) may have the same effect. In addition, reviewing your capital gains and losses may reveal tax planning opportunities—for instance, harvesting losses to offset capital gains.

Here are a few key 2020 tax thresholds to keep in mind:

• The 37 percent marginal tax rate affects those with taxable incomes in excess of $518,400 (individual), $622,050 (married filing jointly), $518,400 (head of household), and $311,025 (married filing separately).
• The 20 percent capital gains tax rate applies to those with a taxable income in excess of $441,450 (individual), $496,600 (married filing jointly), $469,050 (head of household), and $248,300 (married filing separately).
• The 3.8 percent surtax on investment income applies to the lesser of net investment income or the excess of modified adjusted gross income over $200,000 (individual), $250,000 (married filing jointly), $200,000 (head of household), and $125,000 (married filing separately).

Consider the benefits of charitable giving. Donating to charity is another good strategy for reducing taxable income. If you’d like to help a worthy cause while trimming your taxes, it’s worth exploring your charitable goals and various gifting alternatives.

Make a strategy for stock options. If you hold stock options, now is a good time to make a strategy for managing current and future income. Consider the timing of a nonqualified stock option exercise. In light of your estimated tax picture, would it make sense to avoid accelerating income into the current tax year or to defer income to future years? And don’t forget about the alternative minimum tax (AMT). If you’re considering exercising incentive stock options before year-end, have your tax advisor prepare an AMT projection to see if there’s any tax benefit to waiting until January of the following year.

Plan for estimated taxes and required minimum distributions (RMDs). When considering your taxes for 2019, be sure to take any potentially large bonuses or a prosperous business year into account. You may have to file estimated taxes or increase the upcoming January payment. If you’re turning 70½, you’ll need a strategy for taking RMDs from your traditional IRA and 401(k) plans.

Adjust your withholding. If you think you may be subject to an estimated tax penalty, consider asking your employer (via Form W-4) to increase your withholding for the remainder of the year to cover the shortfall. The biggest advantage of this is that withholding is considered as having been paid evenly throughout the year instead of when the dollars are actually taken from your paycheck. You can also use this strategy to make up for low or missing quarterly estimated tax payments.

Proactive Planning
Review your estate documents. To help ensure that your estate plan stays in tune with your goals and needs, you should review and update it on an ongoing basis to account for any life changes or other circumstances. If you haven’t done so during 2019, take time to:

• Check trust funding
• Update beneficiary designations
• Take a fresh look at trustee and agent appointments
• Review provisions of powers of attorney and health care directives
• Ensure that you fully understand all of your documents

Check your credit report. It’s important to monitor your credit report regularly for suspicious activity that could indicate identity theft. Federal law requires that each of the nationwide credit reporting companies (Equifax, Experian, and TransUnion) provide you with a free copy of your report every 12 months, at your request.

Get professional advice. Of course, this list is far from exhaustive, and you may have unique planning concerns not covered here. As you prepare for the coming year, please feel free to reach out to us to discuss the financial issues and deadlines that are most relevant to you.

Whatever your planning may entail, we wish you a happy, healthy, and prosperous 2020!

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Accepting Internship Applications for Summer 2020

Allen Insurance and Financial is accepting applications for its 2020 summer internship program, which offers a 12-week immersion into the company’s three insurance divisions (personal, business and health) and its financial planning/investment management group.

Applications from college juniors and seniors will receive priority review; all applicants will be considered. This is a paid position, based in Camden.

To receive a copy of the job description and start the application process, please email Jill Lang at email hidden; JavaScript is required Deadline for applications will be set in early 2020. Interns should expect to start work in late May or early June 2020 and work through mid- to late August.

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Chemo Caps for Kids Program Receives Strong Support from Midcoast Community

Kim Edgar

Kim Edgar

Allen Insurance and Financial is pleased to announce its continued support for the Chemo Caps for Kids initiative sponsored by Commonwealth Cares Fund Inc., the 501(c)(3) charity founded by Allen’s Registered Investment Adviser–broker/dealer, Commonwealth Financial Network®. Chemo Caps for Kids provides hand-knit and crocheted hats to children undergoing cancer treatment.

“We’ve donated more than 5,000 hats to hospitals across the United States through our Chemo Caps for Kids program,” said Commonwealth CEO Wayne Bloom. “What started as a homegrown effort to help bring smiles to a few kids’ faces has grown into a community-wide project that is making an even greater impact. Our knitters and crocheters now include employees, advisors, family of staff and advisors, and friends of friends who are all using their talents to help kids who are in treatment.”

For five years, Allen Insurance and Financial has been participating in the creation of these caps and invites the community to join the effort. Kimberly Edgar of Allen’s Camden office is coordinating the program locally.

“We are grateful to Cashmere Goat in Camden, Maine Alpaca Experience in Northport, Unity and Ellsworth and Heavenly Socks Yarns in Belfast for their help with publicity to their customers,” said Edgar, noting that a large of Midcoast knitters, all pretty much anonymous, have dedicated  serious time and creativity to this cause.

Anyone interested in donating yarn or knitting time to this project can call Edgar at 230-5831.

Some of hats from Maine have been distributed to hospitals in New England as well as to places such as Phoenix Children’s Hospital and the Ann & Robert H. Lurie Children’s Hospital of Chicago.

Commonwealth Cares provides contributions of time, talent, and financial support to a wide range of philanthropic efforts aimed at relieving human suffering, promoting social and economic growth, and sustaining and protecting our planet’s resources. All operating and administrative expenses for Commonwealth Cares are borne by Commonwealth. One hundred percent of every dollar contributed goes directly to those in need.

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MOFGA Receives Grant from Harvard Pilgrim Health Care and Allen Insurance and Financial

The Maine Organic Farmers and Gardeners Association (MOFGA) recently received a $5,000 grant from Harvard Pilgrim Health Care Foundation and Allen Insurance and Financial to increase access to and affordability of healthy, nutritious food for low income families. MOGFA has a longstanding commitment to help all Maine people acquire local, organic foods regardless of geography or income. Pictured in the photo, left to right, are: Bill Whitmore, Maine Market Vice President, Harvard Pilgrim Health Care; Sarah Alexander, Executive Director, Maine Organic Farmers and Gardeners Association; and Dan Wyman, JD, Insured Benefits Manager, Allen Insurance and Financial.Harvard Pilgrim Health Care and Allen Insurance and Financial donation to MOFGA

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What to do in Case of an Auto Accident

You’re involved in an auto accident. It’s a stressful time but it’s important to remain focused and attentive or find someone who can do that for you.

It is imperative to attend to the injured first, move out of the right of way if possible, call 911 and wait for help.

As your insurance agency, we’d like to remind you about the importance of collecting information and documenting the scene. Here are some recommendations for steps to take in the time immediately after an auto accident.

Call the police, even if the accident is minor. A police report can be invaluable to the claim process and help establish who’s at fault.

Gather information from others involved in the accident:

  • Drivers and passengers (names and contact information)
  • Vehicle descriptions (make, model, year)
  • Driver’s license numbers
  • License plate numbers
  • Insurance companies and policy numbers
  • Eyewitnesses: names and contact information
  • Accident scene location or address
  • Police officer’s name and badge number

Also:

  • Take photos of all vehicles involved and the accident scene, if it is safe to do so.
  • Do not sign any document unless it’s for the police or your insurance agent.
  • Be polite, but don’t tell anyone the accident was your fault, even if you think it was.

Later:

  • Call your insurance company to start the claim process (even if nothing is ever filed).
  • Notify your insurance agent as soon as possible.
  • If a report is written, get a copy from the police department as soon as possible.

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Deb McDonald Achieves ACSR Designation

Deb McDonald

Deb McDonald


Deb McDonald,  a business insurance account manager at Allen Insurance and Financial recently achieved the designation of Accredited Customer Service Representative in Commercial  Lines from the Independent Insurance Agents & Brokers of America.
McDonald has been with Allen Insurance and Financial since 1995.  She lives with her family in Union.
The ACSR designation program was developed to recognize the contribution made to each customer by the service they are provided through independent insurance agencies such as Allen Insurance and Financial.
Independent Insurance Agents & Brokers of America is the nation’s oldest and largest national association of independent insurance agents & brokers with more than 300,000 members. Find them online at independentagent.com.

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Lucas Dunbar Earns AAI Accreditation

Lucas DunbarLucas Dunbar has earned an Accredited Adviser in Insurance designation from the American Institute for Chartered Property Casualty Underwriters.
Dunbar joined the business insurance team at L.S. Robinson Co., our Southwest Harbor, Maine office, in 2016. He is a native of Southwest Harbor and a graduate of Mt. Desert Island High School. His great uncle Lawrence Robinson founded L.S. Robinson Co. in 1932.
Designations such as AAI demonstrate an insurance broker’s tested knowledge in their field. Allen Insurance and Financial supports all its employees in their efforts to continue their education.
The AAI program requires nine separate exams; the course outlines risk analysis techniques and tools, while providing an in-depth understanding of commercial insurance products and services.

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Supporting Waldo Community Action Partners

Allen Insurance and Financial has helped Waldo Community Action Partners kick off a fundraising drive to replace the commercial kitchen stove used by the WCAP Head Start program.

The stove, which has been repaired numerous times until it could be repaired no more, is used daily to prepare nutritious meals for almost 50 children and parents. Dan Bookham of Allen Insurance and Financial’s business insurance division recently presented a check to WCAP Head Start Director Jessie Francis.
WCAP Head Start serves children ages three to five, four days a week, for 128 days per year. WCAP Head Start offers part-time (four hours a day) and full-times (six hours a day) options depending on the needs of the family. Placement is based on a number of criteria; the primary one is family income. There is no fee for WCAP Head Start programs. More information is online at waldocap.org.
Head Start was created in 1964 to give preschool children a “head start” in formal education. Throughout the decades, Head Start has expanded their services to involve the whole family. Head Start supports families in give different component areas: health, nutrition, education, social services, and parent involvement.

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Joanne Billington Serves Up Safety Workshop for Cafe Miranda

Safety in the workplace starts with good information, translated into good practice. Recently the management staff at Rockland’s Cafe Miranda joined Joanne Billington of Allen Insurance and Financial for a safety workshop designed specially for their workplace.
“This workshop is an example of the kind of attentive service we have come to expect from Joanne,” said Kerry Altiero, chef/owner of Cafe Miranda.
Also that day, Joanne delivered Cafe Miranda’s dividend check from MEMIC, the cafe’s worker’s compensation insurer. MEMIC dividend checks are possible because employers have helped prevent workplace injuries and have committed themselves to helping injured employees return to work.

Cafe Miranda Safety Workshop

Pictured, from right, are: Kerry Altiero, chef/owner of Cafe Miranda; Joanne Billington, commercial insurance specialist at Allen Insurance and Financial; Tim Schau, operations facilitator; Andrew Hansen, chef manager; and Casey Cale, front of the house manager.

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Overtime Rule Blocked by Federal Court

On Nov. 22, a federal judge in Texas issued a preliminary injunction, halting the enforcement of the Department of Labor’s (DOL) new overtime rule until further notice. The rule, which was set to take effect on Dec. 1, 2016, would have increased the salary threshold for the “white collar overtime exemptions” to $47,476 per year.
The judge’s ruling gives employers across the country a reprieve from having to raise salaries for exempt employees to the new threshold or pay them overtime. However, an appeal of the ruling is possible. The DOL said in a statement that it was reviewing the court’s order and considering any next steps.
ACTION STEPS
Employers should continue to watch for news of developments related to the overtime rule, as some uncertainty remains. Until a final decision is reached in the case, employers can rely on existing overtime exemption rules.
Employers that have already made adjustments to comply with the new rule may find it difficult to reverse any changes. However, employers may decide to postpone any changes that have not yet been made.
The Future of the Overtime Rule
Supporters of the rule remain committed to what they describe as fair increases in the overtime exemption salary threshold. However, the DOL may be facing an uphill battle in implementing changes to the overtime exemptions.
In his written ruling, the judge suggested that he would side with the parties challenging the rule when resolving the case. He stated that, in issuing the rule, the DOL “exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary threshold such that it supplants the duties test.” However, further steps need to be taken in the court process before the rule is permanently struck down.
Congress may also take action to stop implementation of the rule. In September, the U.S. House of Representatives passed H.R. 6094, which would delay implementation of the final rule until June 1, 2017. The bill would have to be passed by the Senate and approved by the president before it becomes law. President Obama had threatened to veto the bill, but any legislation could fare differently once President-elect Trump takes office.
It is also possible that President-elect Trump could take executive action to block the rule, but it is not clear at this time what approach he would take to change or undo the rule. If the court strikes down the rule, further congressional or executive action may be unnecessary.
Other Issues for Employers
Although the changes to the overtime exemptions may not take effect for some time, if ever, employers must continue to comply with current regulations. In preparing for the rule change, many employers have discovered that employees may have been misclassified, which is an issue that must be addressed to avoid violating the current FLSA regulations.
Via Zywave.