What Issues Should I Consider When Reviewing My Insurance?


Summer is in full swing, and road trips are some of the best ways to get out and explore nature and new places. 

With an average of $4.65 at the pump on the west coast, gas prices aren’t the only costs you’ll encounter. Auto insurance costs rose 15% from last year, and rates will likely continue to climb. 

Insurance providers can often bundle auto insurance with homeowners policies, often for a premium saving, as both are property and casualty insurance. However, understanding these contracts’ various terms and conditions can take time and effort. Deductibles, limits, exclusions, and endorsements can be hidden in the fine print, making it hard to understand the true extent of your protection. 

Property and casualty insurance policies are vital to your overall financial plan. An annual review of your policies is always a good idea to ensure you have the coverage you need. It is also a good exercise to identify potential gaps and areas that have changed since your last review. 

To help, we’ve included an integrated checklist you can also download that outlines key considerations. While the list can help you identify opportunities to consider, we’re always available to meet with you to assist in this analysis. Please reach out; we’d love to help. 

Issues to Consider When Reviewing Your Insurance

Issues to Consider When Reviewing Your Insurance

Uplevel Wealth is a fee-only, fiduciary wealth management firm serving clients in Portland, OR and virtually throughout the U.S. 

What Do I Need to Know About the Debt Ceiling?

Debt Ceiling

After months in and out of the headlines, the debt ceiling issues have become a sharp focus. As we write this, lawmakers are racing to advance legislation before the new June 5th deadline, when the U.S. may be unable to pay all of its bills. Many are understandably nervous, and it’s still unclear how this will ultimately play out. 

How can we maintain perspective around political and fiscal uncertainty? We can start with understanding what the debt ceiling is. 

The federal government often operates with a budget deficit, as spending on things like defense, Social Security payments, and emergency pandemic stimulus checks exceed government revenues, primarily from taxes. 

As the economy grows, tax revenues increase. Over time, these tax revenues are outpaced by spending. The federal government borrows money to pay its bills by issuing Treasury securities, which adds to the national debt and hit the $31.4 trillion debt ceiling in January. Since then, the Treasury Department has employed “extraordinary measures” to ensure the country doesn’t default on its obligations. 

Why is this an issue?

The debt ceiling is a mechanism that requires Congress to approve additional borrowing above these levels. Democrats and Republicans have been in a standoff but made good progress over the Memorial Day weekend. As of Tuesday, May 31st, the House and the Senate still need to pass the deal. Ultimately, getting the bill passed and signed into law by the June 5th deadline remains tight.

What information do we have?

The latest deal may calm nerves among markets and investors alike, as it suspends the $31.4 trillion borrowing limit until January 2025. This sets the debt limit at whatever level it reaches by the 2025 suspension and passes the hot potato to the next presidential administration.

Goldman Sachs summed the deal up this way: “Major reduction in uncertainty, minor reduction in spending.”

Why does this sound familiar? 

A debt ceiling “crisis” is nothing new. According to the Congressional Research Service, the debt ceiling has been raised 102 times since World War II. Similar debt ceiling standoffs have occurred over the past decade, with the limit suspended and expanded in 2013, 2014, 2015, 2017, 2018, 2019, and 2021. 

Fortunately, despite the headlines and investor concerns, these episodes had little long-term impact on markets. The one exception occurred in 2011 when a similar standoff led Standard & Poor’s, a credit rating agency, to downgrade the U.S. Debt and the S&P 500 to tumble19%. Ironically, the prices of Treasury securities increased. Why? Despite the downgrade, investors still believed Treasuries remained the safest in the world, even during heightened uncertainty. Ultimately, the debt ceiling was raised and a new budget was approved, allowing markets to bounce back. 

What happens if a deal isn’t reached and the U.S. defaults? 

Although this remains unlikely, a default would significantly impact the U.S. and across the globe. A few potential ramifications:

  • Delayed payments of federal benefits – things like Social Security payments and veterans benefits
  • Higher borrowing costs
  • A potential downgrade of U.S. debt
  • Increased market volatility
  • Global recession

While we are not in the business of making predictions, it isn’t far-fetched to see that the ramifications would be hard-hitting. 

What can we do? 

Though we’ve been here before, there is still no clear understanding of how investors may be impacted. If an agreement isn’t promptly reached, investors may have to accept higher stock market volatility in the short term. While it may be tempting to sit on the sidelines until the negotiations are resolved, it’s important to remember that volatility goes in both directions–up and down–and very often, the market’s worst-performing days are followed by some of its best. 

Investing in a well-diversified portfolio, owning safe bonds, and keeping a prudent cash buffer for shorter-term goals are the best antidotes to market volatility.  In times of heightened uncertainty, staying focused on what we can control, maintaining a long-term perspective, and remaining disciplined are the keys to weathering whatever lies ahead.

Clear as Mud?

Have additional questions about the economy, markets, or your financial plan? Please reach out—we’d love to help.  

Uplevel Wealth is a fee-only, fiduciary wealth management firm serving clients in Portland, OR and virtually throughout the U.S. 

What Issues Should I Consider When Reviewing My Tax Return?

Review your tax returns

You worked hard to get all your info to your CPA as soon as possible to have your taxes filed and completed by April 18th. Barring any extensions or other issues, you’ve likely received your return by now. If you’re like most people, you either celebrate the refund or bemoan the amount owed, and then move onto other things. 

Spoiler alert: take the time to review your return. 

We get it. Reviewing tax returns can be daunting and difficult. It’s hard to keep up with the many state and federal complexities and often changing rules. Tracking your exposure to various taxes—ordinary income tax, capital gains tax, alternative minimum tax, net investment income tax—and your rights to various credits and deductions requires time and effort.

We’ve aimed to simplify things a bit via a checklist. Feel free to download it here.






























Clear as Mud?

While we’re not CPAs, we love a good tax return and discussing some of the best opportunities for you. Please reach out—we’d love to help.  


Uplevel Wealth is a fee-only, fiduciary wealth management firm serving clients in Portland, OR and virtually throughout the U.S. 

Ongoing Banking Turmoil: Cause for Concern?

Ongoing Banking Turmoil

The recent failure of three U.S. banks has dominated news headlines for the past few weeks and has spread to Europe. Credit Suisse, Switzerland’s second largest “global systemically important bank” and latest institution teetering on collapse, was purchased by UBS in a $3.2 billion deal brokered by regulators, making it Europe’s most significant banking merger since the 2008 financial crisis. 

Smaller U.S. banks have also turned to the Federal Reserve for assistance, borrowing $165 billion, which surpassed the previous record of $111 billion set in 2008. Eleven larger banks, such as Bank of America and Wells Fargo, came together to aid First Republic Bank to the tune of $30 billion. This collaborative rescue effort aimed to shore up customer withdrawals and restore confidence in the banking system. 


Testing Our Resolve

While the situation is still evolving, these banking system concerns add to the numerous challenges investors have faced in recent years. Over the past 12 months alone, stubborn inflation, aggressive Fed rate hikes, Russia’s invasion of Ukraine, and a bear market have all made hope for the future sometimes difficult to see.

In 2021, it wasn’t uncommon to feel concerned about the sustainability of the economic recovery and excessive stock market valuations. In 2020, the pandemic and nationwide shutdowns threatened the economic and financial system, in addition to the well-being of everyday folks. Many of these events occurred seemingly out of left field and easily caught us off guard.

While there are unique circumstances behind the failures of Credit Suisse and Silicon Valley Bank, banking crises are not as unexpected as global pandemics and military invasions. With the benefit of hindsight, these bank failures echo other collapses across history. 


Common Causes

The common thread across these episodes is the availability of money, the expansion of credit, and the eventual tightening of financial conditions. Like a sugar rush, the supply of credit and the flow of funds through the global financial system can drive asset bubbles, appreciating currencies, and risk-taking in a particular market or across a whole country. Sooner or later, however, there is a sugar crash as returns peter out, sentiment shifts, and conditions tighten.

While failed banks are not innocent bystanders – they often involve poor risk management and excessive risk-taking – they are also subject to macroeconomic trends just like any other corporation. When both the supply and demand for money by individuals and businesses are expanding, banks have strong incentives to extend more and more credit. As this compounds, it can lead to asset bubbles in real estate, the stock market, and more, which in turn further increase the appetite for credit. While this can continue for longer than expected, eventually it grinds to a halt.

It’s no coincidence that this is occurring just as the Fed, the European Central Bank, the Bank of England, and other monetary authorities are removing liquidity from the system by shrinking their balance sheets and raising interest rates. Coupled with lower asset prices across the broad stock market, the tech sector, and areas like cryptocurrencies, it’s natural for financial stresses to build. 


What does this mean for you? 

Within the S&P 500, regional bank stocks have struggled, falling 34% year-to-date and the broader financial sector declining 9.4%. Despite those losses, the S&P 500 has still gained 3.4%. This is because sectors such as Information Technology and Communication Services have risen 17.5% and 18.4%, respectively, over this same period. Hopefully, this drives home the importance of staying diversified both across and within markets.

While some folks may always wait for the “opportune time” to invest in the market, these same investors may be hesitant to take advantage of temporary downturns due to the nature of each market crisis. What inevitably happens is missed opportunities when markets eventually recover and too much time out of the market. 

The bottom line: Despite the big market and financial events this year, the best course of action is still to stick to well-constructed portfolios and financial plans. While this can be easier said than done, we’re here to help you. Please reach out


Uplevel Wealth is a fee-only, fiduciary wealth management firm serving clients in Portland, OR and virtually throughout the U.S. 

Live in a High Tax State Like Oregon? Here Are 9 Ways to Lower Your Tax Burden

Lower Your Tax Burden

I can’t wait to do my taxes, said no one ever. This especially rings true if you live in Portland, Oregon. 

According to a report from Ernst & Young, Multnomah County now has the second-highest total state and local income tax rate in the nation of 14.69%. New York City has the highest in the nation at 14.78%. 

That’s not all. The top tax rate kicks in for single taxpayers with incomes above $125k and joint filers at $250k. By comparison, New York City’s top tax rate doesn’t kick in until $25 million. 

This means some Uplevel clients could pay approximately the same state and local tax rates as New York City residents and celebrities Jay-Z and Jerry Seinfeld.   


Wondering how this is possible? Here’s how it adds up: 

  • Oregon income tax is 9.9% on income over $125k for single filers and $250k for married filing jointly. Note: Oregon does not tax Social Security benefits. 
  • The Oregon transit tax is a statewide 0.10% payroll tax that employers withhold from employee wages.
  • The Portland Metro area, including Multnomah, Washington,and Clackamas Counties, assess a homeless service tax of 1% for single filers with income over $125k and married filing joint filers with income above $200k. 
  • In addition to the above, Multnomah County residents pay a Preschool for All Personal Income Tax. Joint filers with incomes above $200k pay 1.5%, and an additional 1.5% on taxable income above $400k. 
    • Note: Not a resident of Multnomah County? You may not be in the clear. If your income is sourced within the county, you are subject to the tax thresholds. Also, the rate will increase by 0.8% in 2026. 
Looking to lower your tax burden? Here are 9 things to consider. 

1.  Understand how the numbers work

Taxes are complicated. We’ve simplified things by creating a single place to review contribution limits, tax brackets, and deductions.


2.  Max out retirement plan contributions 

High inflation put pressure on the IRS to give healthy bumps to annual contribution limits for 2023. For 401(k)s, 403(b)s, most 457 plans, and Thrift Savings Plans, the limit is now $22,500. If you’re 50 or older, you are eligible for an additional “catch-up” contribution of $7,500, raising your total contribution eligibility to $30,000. 

Stashing more money away in retirement accounts via pre-tax dollars helps lower your adjusted gross income (AGI), which also reduces your taxes. While a lot of folks intuitively understand this, a recent Vanguard report found that only 14% of people with Vanguard 401(k) accounts were contributing the maximum amount allowed. The majority of these people made more than $150,000. 


3.  Take advantage of employer benefits

Participating in benefits your employer offers like Flexible Spending Accounts (FSAs), Dependent Care FSA, and Health Savings Accounts (HSAs) are ways to save money and lower taxes.

There are also situations where it can be advantageous to combine benefits in order to maximize tax savings. Here are two examples:

  • If you qualify for your employer’s deferred compensation plan, it may make sense to accelerate your contributions in a given year while also exercising some of your stock options in order to stay within a certain tax bracket. 
  • If you have stock options that are subject to vesting, filing an 83(b) election could be advantageous for your tax situation. 


4.  Review your paycheck, particularly if you’ve changed jobs

If you worked for more than one employer last year, it’s possible you had too much Social Security tax withheld from your pay. In 2022, wages up to $147,000 were subject to Social Security tax, or $9,114 at the 6.2% Social Security contribution rate.

New employers don’t take into account wages from a previous position in calculating these taxes, so it’s up to you to monitor. If you had more than the maximum withheld, you may be eligible for a credit on your tax return for the excess amount. 

Bonus tip: it’s also prudent to review the total amount deducted from your final paycheck for  FSAs and HSAs. We’ve encountered situations where deductions were made from a client’s last paycheck but were never deposited into their accounts. 


5.  Consider Roth conversions  

A Roth IRA conversion takes all or part of your existing traditional IRA balance and moves it into a Roth IRA. The money in a traditional IRA hasn’t been taxed yet, so in converting you will owe tax on the amount you convert.

Why would anyone pay taxes early? There are a few good reasons:

  • Providing you meet certain requirements, Roth IRA withdrawals are tax-free in retirement.
  • Unlike Traditional IRAs, Roth IRAs do not have required minimum distributions (RMDs) once you reach age 72 or during your lifetime. So, your money continues to grow tax-free. 
  • Roth IRAs are some of the best types of accounts to pass on to beneficiaries. While your heirs will have to take RMDs, they won’t have to pay any federal income tax on the withdrawals. Given recent legislation changes, inheriting Roth assets is even more favorable.  

A Roth conversion can be a great option for some and a costly mistake for others. Here are 4 important considerations to make before converting your traditional IRA into a Roth IRA.


6.  Be strategic with charitable contributions

Donating appreciated holdings, such as stocks, mutual funds or exchange traded funds (ETFs) held more than one year directly to charity can reduce your tax liability. The benefit of this type of donation is twofold:

  • Rather than having to sell appreciated investments to generate cash to donate, and incurring capital gains that are taxed up to 23.8% each year, the shares can be directly transferred to a charity
  • You receive the market value of the shares as a tax deduction and the charity can subsequently sell the investments tax-free because of its non-profit status. 

If you’re looking to turbocharge your tax deductions, consider a Donor Advised Fund (DAF) “bunching” strategy. A DAF is an account established specifically for charitable giving and can be funded with appreciated holdings, among other things. Several years of charitable contributions are then “bunched” into a single tax year–enough to exceed the standard tax deduction–and charitable donations are spread out over several years. 


7.  Be mindful of the types of investments you hold

There’s an endless sea of investment options to choose from. If you have a taxable brokerage account and it aligns with your financial plan, it may make sense to utilize municipal bonds and/or exchange traded funds (ETFs). 

Municipal bonds are like loans you provide for a set timeframe to your local, state or federal government. You can likely find quality and generally safe muni bonds that provide tax-free interest payments. 

ETFs tend to be more tax-efficient than most mutual funds and usually incur less taxable distributions. 


8.  Tax-loss harvesting

Strategic tax-loss harvesting involves selling some of your investment holdings that are currently at a loss, using the proceeds to invest in something substantially equivalent for 31 days or longer, and utilizing the tax loss to offset capital gains taxes from other investment sales. 

If you don’t already have capital gains, you can offset up to $3,000 in ordinary income with realized capital losses. A word of caution however–be sure to familiarize yourself with wash sale rules before repurchasing a security sold at a loss, or you may find yourself in a bit of hot water with the IRS. 


9.  Improve your home’s energy efficiency 

If you’re looking to make improvements to your home, consider energy-efficient upgrades. Thanks to the recent Inflation Reduction Act, improvements like solar panels, energy-efficient windows and doors, heat pumps, and more offer tax rebates and financial incentives


Adding It All Up 

Whatever your tax situation, being strategic with your planning can save thousands of dollars in a given year. If you’re ready to create a plan, or just unclear where to go next, please reach out. We’re here to help.


Uplevel Wealth is a fee-only, fiduciary wealth management firm serving clients in Portland, OR and virtually throughout the U.S. 

What The Secure Act 2.0 Means For You

Secure Act 2.0

At the end of 2022, the Consolidated Appropriations Act was passed, which included a retirement bill known as SECURE Act 2.0. This law was built upon the original SECURE Act legislation passed in 2019. 

The SECURE Act 2.0 expands and changes the rules on saving for retirement, withdrawals from retirement plans, increases the savings thresholds and tax benefits for Roth IRAs, 401(k) plans and more. 

Ultimately, most people just want to know what parts of the Secure 2.0 Act apply to them. Here’s a summary of key provisions to pay attention to. 


High Wage Earners & Catch-Up Contributions 

Catch-up contributions allow folks 50 and older to save even more in workplace retirement plans.. For 2023, the catch-up contribution was raised to $7,500. This is in addition to the regular annual contribution limit of $22,500, meaning those  50 and above eligible to save $30,000 in total for 2023. 

Effective in 2024, people with wages (like w2 income) above $145k (which will be indexed for inflation) are only eligible for Roth catch-up contributions. Regular contributions may still be made with pretax dollars. The new rules apply to 401(k), 403(b) and 457(b) plans, not to catch-up contributions for IRAs. The IRA catch-up contribution limit will finally adjust automatically for inflation from its stagnant $1k cap in 2024 as well. 

Planning opportunities: You may be able to avoid mandatory Roth 401(k) catch-up contributions with income above $145k if you are self employed. Also, if you change jobs in the middle of the year, you may still be able to do pretax catch-up contributions even if you’re a high wage earner. 


Roth-Related Changes

If you’re an employee with an employer-sponsored retirement plan, you’ve only been able to receive matching contributions on a pre-tax basis. Employers may now offer the option to match and make non-elective contributions via Roth 401(k) accounts. Heads up: You’ll also pay taxes on these employer contributions. 

Beginning in 2024, employer retirement plan based Roth accounts like Roth 401(k) and Roth 403(b) will no longer require RMDs, similar to individual Roth IRAs. SEP and SIMPLE IRAs will now allow Roth contributions. 

Good news: One component that was not restricted or eliminated was existing Roth strategies, like backdoor conversions or mega-back-door Roth contributions. 


Additional Flexibility for 529 College Savings Accounts 

Beginning in 2024, it’s possible to move money from a 529 plan directly into a Roth IRA, and the transfers are not subject to income limitations. This comes as great news for savers who had concerns about potentially overfunding their child’s 529 plan. There are, however, certain conditions that must be met:

  • The Roth IRA receiving the money must be in the same name of the beneficiary of the 529 plan; 
  • The 529 plan must have been maintained for at least 15 years;
  • The annual limit is the IRA contribution limit for the year, reduced by any regular IRA or Roth IRA contributions made that year;
  • Lifetime transfer limit of $35k

Planning opportunity: If a parent contributed to a 529 account for their child, maintained ownership, and the child no longer needed the 529 money, it appears the parent may be able to change the beneficiary to themselves and then transfer the money to their own Roth IRA, subject to the conditions above. Note: Before doing so, please seek expert guidance. Some legislation interpretation still needs to be confirmed or rejected.  


Changes to Qualified Charitable Distributions (QCDs)

QCDs have been one of the best ways for people who are charitably inclined to give money directly from an IRA in a tax-efficient manner. The annual limit of $100k will now be indexed for inflation starting in 2024. 

It’s also now possible to use a QCD to fund certain types of charitable trusts. However, the maximum amount that can be moved is $50k. Given the time, expense and complexity that comes along with these types of trusts, this modest dollar limit may preclude most people from doing so. 


Changes to Required Minimum Distributions (RMDs)

RMDs are when you must take withdrawals from your retirement accounts, regardless if you want or need the money. The original SECURE Act raised the age for RMDs from 70.5 to 72. SECURE 2.0 pushes this out further:

  • Age 73 for folks born between 1951–1959 
  • Age 75 for folks born in 1960 or later
  • Turned 72 in 2022 or earlier? You must still keep taking RMDs.

The bill also decreases the penalty for missed RMDs from 50% to 25% of the shortfall, and providing the mistake is corrected in a timely manner, the penalty is now only 10%. 

Have a younger spouse? If they predecease you, you can now elect to be treated “as your deceased spouse,” which allows you to take RMDs based on their age rather than your own.

Planning opportunities: Pushing out the extra income created by RMDs age could mean additional years before the dreaded spike inMedicare Part B/D premiums and perhaps a few more years of Roth conversions. Please work closely with your advisor to see if this applies to you. 


Other Changes Worth Noting 

At over 400 pages, the legislation is long and cumbersome. While it’s impossible to include every component, we’ve focused on the items that are most likely to impact our clients. A few other items worth noting:

  • In 2028, some S Corp owners who sell shares to an Employee Stock Ownership Program (ESOP) may be eligible to defer up to 10% of their gain by taking advantage of a like-kind exchange; 
  • SECURE 2.0 expanded the list of 10% penalty exceptions for accessing retirement funds during times of need;
  • Beginning in 2024, employers can “match” an employee’s student loan payments by contributing an equal amount to a retirement account on their behalf. 


We’re Here to Help 

As we digest these latest changes and wait for important clarification on items that still remain ambiguous, we are already thinking proactively about which of our clients might be able to benefit. 

If you are wondering how these changes pertain to your situation and would like some professional guidance, please reach out, we’re here to help. 


Uplevel Wealth is a fee-only, fiduciary wealth management firm serving clients in Portland, OR and virtually throughout the U.S. 

How To Create a Charitable Giving Strategy

Charitable Giving

These days, requests for charitable donations are a year-round occurrence. Whether it’s giving money after a natural disaster, a request from your alma mater, or simply being asked whether you want to “round up” at the checkout line, there are endless opportunities to give. 

The end of the year is an especially good time to think about your charitable giving strategy to ensure your donations make the biggest impact, both to the organization and to yourself. 

Whether you’re a regular giver or just beginning to think about integrating charitable giving into your finances, having an informed plan will ensure, as Benjamin Franklin said, that you can “do well by doing good.”

An effective charitable giving strategy has three main components, which we’ll cover today. 


#1 – Types of Assets to Donate


For small charitable gifts, writing a check or donating via credit card is certainly a popular and easy option. Documentation for cash gifts, no matter how small, is key. Make sure you keep donation receipts, canceled checks, or credit card statements as proof of your gift.

It’s also important to remember that you may not receive a dollar-for-dollar tax deduction for your cash gifts in a given year. Deductions for cash donations are limited to 60% of your adjusted gross income (AGI) in a single tax year, with any contributions above these limits carried forward for up to five years.  

In 2020 and 2021, the CARES Act encouraged donations to charitable organizations by giving all taxpayers a $300 (single filer) or $600 (married filing jointly) deduction for cash gifts. It’s important to be aware that this deduction was not extended to 2022.


Appreciated Investments

Despite the stock market’s volatility in 2022, many people still have appreciated holdings, such as stocks, mutual funds or exchange traded funds, in their portfolio. Shares that have been held more than one year can be donated directly to a charity. 

The benefit of this type of donation is twofold: 

  • Rather than having to sell appreciated investments to generate cash to donate, which would result in paying tax on capital gains, the shares can be directly transferred to a charity. 
  • The organization receives the market value of the shares as a donation and can subsequently sell the investments tax-free because of its non-profit status. 

Donations of investments are generally deductible up to fair market value, but it’s important to remember that current deductions are capped at 30% of AGI, with a 5-year carryforward. 


Tangible Personal Property

Many organizations gladly accept used items such as clothing, furniture, or even vehicles, as long as they are considered to be in “good” condition under IRS rules. Most used household items, such as those donated to Goodwill or Salvation Army, should be valued at “thrift store prices” when determining an appropriate deduction amount. 

Items donated over the course of a year worth more than $250 but less than $500 should be documented and include the name and address of the organization, a description of the items donated, the original cost, and current fair market value of the items donated. 

Donations exceeding $500 fair market value up to $5,000 need to be documented on IRS Form 8283, which asks for more detailed information on the item’s condition, acquisition cost, and methodology for calculating the fair market value. Donations exceeding $5,000 in value require all the items listed above, in addition to an appraisal by a qualified appraiser. 


#2 – Tax Benefits of Giving

For some, the tax benefit received from making charitable contributions is secondary to supporting organizations doing meaningful work. For others, reducing tax liability in a given year is the primary motivating factor. 

Regardless of where you fall, being aware of current laws and adjusting your charitable giving strategy appropriately can lead to some meaningful tax savings. 


Standard Deduction Versus Itemizing 

One of the biggest tax considerations when it comes to charitable giving is whether you take the standard deduction or itemize. The Tax Cuts & Jobs Act of 2017 nearly doubled the standard deduction and reduced or eliminated a lot of tax deduction items. 

The standard deduction for single or head of household taxpayers in 2022 is $12,950. A married couple needs over $25,900 in deductions in order to itemize in 2022.

How does this relate to your charitable giving? Think of the standard deduction as the “hurdle” your deductions must overcome to realize any additional tax savings specifically from charitable giving. If your charitable giving plus other deductions don’t exceed the standard deduction, you are receiving the same tax benefit as if you had not donated anything to charity for the year.


Donor Advised Funds

Because of the high standard deduction, the popularity of Donor Advised Funds has skyrocketed in recent years. A Donor Advised Fund (DAF) is an account established specifically for charitable giving and can be opened with big brokerage firms like Schwab and Fidelity at very low annual costs. 

Contributions to DAFs can be made with cash.  A more beneficial strategy from a tax perspective, however, is funding a DAF with appreciated securities like stocks or mutual funds, real estate, crypto currencies, or even privately held businesses. 

The tax deduction for the contribution to the DAF is received in the year the contribution is made, and gifts to charitable organizations can then be spread out over subsequent years. 

For those looking to turbocharge their tax deductions, consider  a “bunching” strategy.   Several years of charitable contributions are made in a single tax year–enough to exceed the standard deduction–and charitable gifts are spread out over several years. 


Qualified Charitable Distributions

Qualified Charitable Distributions, or QCDs, are a great option for individuals with Individual Retirement Accounts (IRAs) who are 70.5 or older to give to charity and save on taxes.

Donations can be made directly from IRA accounts and the amount withdrawn is not subject to tax, as with regular IRA withdrawals. For those who have reached age 72 and are subject to annual required minimum distributions, a QCD will count towards the RMD, again reducing the tax that would be paid otherwise.

The maximum amount that can be given to charity in a year via a QCD is $100,000 and it’s important to still keep detailed records for tax purposes. 


#3 -Values Behind Your Giving

Beyond the technical aspects of giving, one of the most important considerations to any charitable giving plan is a thorough understanding of your personal values and goals. 

Start by taking a step back and contemplating what motivates you to give – is it the “warm-glow” you feel when making a donation, concerns for the benefit of others or causes, or some combination of the two?

Thinking through these factors can help you make rational giving decisions, make impactful gifts, and have a thought-out response when solicited for support. 


We’re Here to Help

If you are ready to start thinking about a charitable giving plan, or need guidance on adjusting your current plan, please reach out. We’re here to help. 

Uplevel Wealth is a fee-only, fiduciary wealth management firm serving clients in Portland, OR and virtually throughout the U.S. 

Does a Roth Conversion Make Sense for Me?

Roth Conversion planning

As fall ends and winter begins, many people wonder what end of the year financial tasks and tax planning strategies they should be thinking about. 

One planning opportunity we review for clients is a Roth IRA conversion. 

A Roth IRA conversion takes all or part of your existing balance in a traditional IRA and moves it into a Roth IRA. The money in a traditional IRA hasn’t been taxed yet, so in converting you pay taxes on the money your investments earned and on any contributions you originally deducted on your taxes.

Why would anyone pay taxes early? There are a few good reasons:

  • Providing you meet certain requirements, Roth IRA withdrawals are tax-free in retirement.
  • Unlike Traditional IRAs, Roth IRAs do not have required minimum distributions (RMDs) once you reach age 72 or during your lifetime. So, your money continues to grow tax-free. 
  • Roth IRAs are some of the best types of accounts to pass on to beneficiaries. While your heirs will have to take RMDs, they won’t have to pay any federal income tax on the withdrawals. Given recent legislation changes, inheriting Roth assets is even more favorable.  

A Roth conversion can be a great option for some and a costly mistake for others. Here are 4 important considerations to make before converting your traditional IRA into a Roth IRA. 


  1. Do you expect your income to increase in the future? 

A big appeal of Roth accounts is tax-free withdrawals in retirement. If you believe you will be in a higher tax bracket in the future, it may make sense to pay taxes now at a lower rate. It may also make sense if your income is temporarily lower (i.e. between jobs for an extended period, missed a bonus, etc.) 

If offered by your employer’s plan, also consider making Roth 401(k) and after-tax 401(k) contributions, which you may be able to convert to a Roth IRA through a mega-backdoor conversion. Note: this can be tricky, so be sure to talk to a qualified professional for help. 

On the other hand, if you expect your income to decrease in the future, a Roth conversion may not make sense for you. Instead, consider strategies to minimize your tax liability now, such as deductible traditional IRA and 401(k) contributions. 


    2.  Do you have cash outside your retirement accounts to pay the taxes due upon conversion? 

While it’s possible to use some of your IRA to pay the tax bill, it’s typically not advised. Money withdrawn from your IRA to pay conversion taxes is considered a distribution, which could push you  into a higher tax bracket. It could also result in a 10 percent penalty.  

Additionally, using retirement funds to pay tax erodes the value of a Roth conversion. There’s less money compounding and growing tax-free. 


    3.  Will you need distributions from the Roth IRA within 5 years? 

The money you convert into a Roth IRA must stay there for a 5-year holding period. If withdrawals are made before the 5 years are up, you could be looking at a 10 percent penalty and/or additional income taxes. 

If you’re retiring soon and will need to take distributions from your Roth, a conversion may not make sense for you. 


    4.  Will a conversion bump you into a higher tax bracket? 

If you’re on the cusp of the next tax bracket, it’s possible to still do a Roth conversion by only converting a portion of your traditional IRA. Spreading the conversion across several years, as opposed to one, can lower your yearly tax obligation. 


Other Considerations

As we write this, the stock market is down 15% for the year. When account values are temporarily lower, the tax cost to convert is also lower – you pay tax on a smaller portfolio balance. When the market rebounds, you then have a larger portion of your total portfolio in a tax-free account.

You may also have expiring tax carryforwards or credits to use that could provide additional incentives to do a Roth conversion. 

Heads up: if you currently or will soon participate in income-based benefits like Medicare or Affordable Care Act subsidies, a Roth conversion could impact the amount you pay or receive. 

Before making any moves, know that a conversion is permanent–you can’t revert the money back to a traditional IRA. 


We’re Here to Help

Wondering if a Roth IRA conversion is right for you? The decision hinges on many personal and unique circumstances, so it’s best to speak with a financial professional first. Reach out, we’re here to help.


Uplevel Wealth is a fee-only, fiduciary wealth management firm serving clients in Portland, OR and virtually throughout the U.S. 

3 Reasons for Optimism Among Market & Economic Uncertainty

Optimism Among Uncertainty

It’s no secret that this year has been full of market and economic uncertainty. Inflation, the Fed, geopolitics and more continue to be on most of our radars. 

Perhaps the most important way to stay grounded amongst the uncertainty is by being familiar with the facts and figures that drive markets in the long run, rather than the speculation and opinions that occupy headlines for a day or two. 

As a result, we see three reasons to remain optimistic. 


Corporate Earnings 

Corporate Earnings are the link between the economy and markets. Although markets can fluctuate in the short run, rising earnings are what allow stocks to create wealth for investors over full business cycles.

While it is still early in the current earnings season, with about a quarter of S&P 500 companies having reported, overall earnings are exceeding beaten-down expectations. Despite inflation and slower growth, which have directly impacted corporate earnings reports, the numbers remain positive. A commonly used metric is Earnings Per Share (EPS), which is how much money a company makes for each share of its stock. Consensus estimates are that S&P 500 EPS will grow 6.9% over the next twelve months, which is still healthy despite being below the average of 7.9% since the mid 1980s. 

Not only do growing earnings continue to support market valuations, which are the most attractive in years, they are a reason to stick to appropriate asset class allocations in portfolios. Since not all sectors can be expected to perform well at all times, staying diversified remains important.


Markets Have Done Well Across Political Parties 

With upcoming midterm elections on November 8th, it seems natural to assume that politics could impact stock market returns. After all, elections do affect economic policies which directly impact specific industries and companies. However, how this impacts broader financial markets is often not as straightforward.

History shows that markets have done well in a variety of political configurations under both Democrats and Republicans and, conversely, that poor market conditions often have little to do with politics. 

The chart below shows that although there are variations between party configurations, they are all quite positive. It is not the case that one party’s leadership always results in poor economic growth or market returns, and vice versa.

The full economic cycle is what matters for investment returns, and this often has less to do with who’s in office than other factors that drive growth. For instance, in the 1990s, it’s unlikely that the Clinton administration and the Republican controlled Congress at the time were the main drivers of the tech boom of that era. Similarly, it’s hard to argue that the George W. Bush White House or the split Congress at that time were the reasons for the subsequent bear market of the early 2000’s or the later housing crisis. These were driven by technological and economic trends that were larger than politics.

Perhaps most importantly, economic policies are difficult to evaluate and often work with a lag. There are always pundits – on both sides of the aisle – predicting doom and gloom based on the other party’s proposals. While there are policies that can promote long-run investment spending and labor force growth, the record shows that it’s incredibly difficult to predict the economic impact of any particular proposal. 

For instance, while historical corporate tax cuts may have resulted in short-term jumps in the stock market, the true economic benefits occurred over years and decades across political cycles – and far beyond the attention span of short-term traders and media coverage.


IRS Updates for 2023 May Help Many Households

While marginal tax rates still remain at historic lows, the recently announced IRS adjustments to income tax brackets and the standard deduction could also help many of us. Each year, the IRS makes adjustments to match the average year-over-year increase in what is known as the “Chained Consumer Price Index,” so that taxpayers don’t “creep” into higher tax brackets due to inflation. The IRS has announced 7% increases to these ranges and deductions for the 2023 tax year. As a result, many workers could see higher take-home pay starting January as payroll deductions decrease. These excess savings will be a welcome change even if they don’t fully offset higher prices.

In addition to income tax brackets and the standard deduction, the IRS also made inflation adjustments to many employee benefits, including 401(k) contribution limits

For employees who participate in 401(k), 403(b) and most 457 plans the limit for 2023 is increasing to $22,500. Employees 50 and older are eligible for a $7,500 catch up contribution, bringing the total contribution amount to $30,000. IRA contribution limits didn’t see as much of a lift, with a $500 bump from 2022 to a total of $6,500. IRA catch-up contributions for those 50 and older remains unchanged at an additional $1,000. 

For those who can swing it, maxing out these contributions can help you save more in taxes. 


We’re Here to Help

If you have questions about how the IRS updates may impact you, or are ready to put a plan for your future in place, reach out… we’re here to help. 


Uplevel Wealth is a fee-only, fiduciary wealth management firm serving clients in Portland, OR and virtually throughout the U.S.