Worley Erhart-Graves Financial Advisors

NEWSLETTERKNOWLEDGE IS YOUR POWER
FOURTH QUARTER 2017

Upcoming Workshop: Retirement Planning

You have worked and saved for
years, and now you want to retire.

Perhaps the following questions have crossed your
mind: How do I make my portfolio last my lifetime?
How do I take money out of my retirement
accounts? What do I need to know about Social
Security? What taxes do I need to know about
for retirement? We will address these questions
and more at our upcoming Retirement Planning
workshop.

Juli Erhart-Graves, CFP® is hosting this workshop
designed for those who want to prepare for
retirement.

WORKSHOP DETAILS:

This workshop is open to anyone, so feel free to pass WHEN: Tuesday, January 30, 2018, 6-7:30 p.m.
this information along or invite a friend who is interested
in this topic. Light refreshments will be served. WHERE: The Pyramids, Pyramid Three,
Lower Level, Conference Room A
RSVP: By Friday, January 26, 2018 to (3500 DePauw Blvd, Indianapolis, IN 46220)
[email protected] or
by calling 317-872-5090 COST: None, but space is limited.

Worley Erhart-Graves Financial Advisors is a Registered Investment Advisor. Registration as an investment advisor is not an endorsement of the firm by
securities regulators and does not mean the advisor has attained a particular level of skill or ability. All expressions of opinion reflect the judgment of
the authors as of the date of publication and should not be construed as personalized investment advice. Different types of investments involve varying
degrees of risk, and there can be no assurance that any investment will either be suitable or profitable for a client’s portfolio. Worley Erhart-Graves Financial
Advisors is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Worley Erhart-Graves Financial Advisors, Inc., is affiliated with Smitson Erhart-Graves Tax Advisors, LLC, through common control and ownership. Smitson
Erhart-Graves Tax Advisors provides accounting and tax preparation services. If you require such services, we may recommend you use Smitson Erhart-
Graves Tax Advisors, although you are under no obligation to do so. Fees for financial planning and investment advisory services are separate and distinct
from the fees Smitson Erhart-Graves Tax Advisors charges for their services.

Didn’t I Already Pay that Bill?

Juli Erhart-Graves, CFP®

About 10 years ago, I decided to get my family’s medical this week, I received a $1,300 invoice for a medical bill that
records and insurance history organized. I hadn’t been keeping I paid back in June. If I hadn’t organized my records, I might
track of our medical expenses throughout the year, which have forgotten I’d already paid that bill.
made tax time stressful. When I did this, I picked up a habit that
has ended up saving us thousands of dollars over the years. I’m EOBs are also helpful because they keep a tally of how much
sure it can save you thousands as well! of your deductible and out-of-pocket maximum has been
met. It’s an easy reference to let you know where you stand
The habit? I started saving the Explanation of Benefits (EOB) throughout the year.
sheets the insurance company produces when it receives
a claim and matching them to the invoices I receive from It would be easy to assume medical bills are correct and you
doctors and medical billing services. It sounds so simple, but need to pay what you are billed, but I encourage you to always
you would be amazed at how often medical invoices are match up EOBs to the invoices you receive. The new year is the
wrong! Sometimes they bill you before the insurance company perfect opportunity to get a new system in place for ensuring
has paid. Other times, they run into a snag with the claim and you don’t pay more than you should for medical services.
resolve it by simply sending you a bill for the full amount. Just

Yin and Yang

Bonnie Struck, CMFC®

What do Black Friday, Cyber Monday, appreciate. However, value stocks offer another benefit:
and value stocks have in common? income. Value stocks are typically well-established
companies paying regular dividends. Generally, growth
Paying bargain prices for something stocks do not pay dividends. The profits are poured back
you want or need. into the company to increase the share price. As we all
know, more growth potential may cause more portfolio
This not only excites shoppers, but investors as well. The volatility.
Yin and Yang of stock buying is having both value and
growth stocks represented. These diversifiers provide Value stocks tend not to be as glamorous as growth stocks
different characteristics in a desirable portfolio. Your (Google, Facebook, etc.), but they have merit. As you age,
hope as an investor is for both value and growth stocks to you may want to lower your portfolio volatility without

Am I Required to Pay Sales Tax?

Pam Smitson, CPA, CGMA, Financial Planner

As I clicked the “place order” button on my Amazon purchase, the tax later as a “use tax” on their state income tax return.
I noticed sales tax was included in the final amount. I pay Unfortunately for the state, it is estimated that less than 5
attention to those things, as should you. percent of Hoosiers remit their use tax. There are items, such
as food ingredients for human consumption, exempt from
The default rule throughout the United States is based on the sales tax. However, most online purchases do require sales tax
1992 U.S. Supreme Court decision regarding the “physical to be paid to the state. Therefore, if you think you are getting
presence rule,” which determines if a business is required a bargain for not having to pay the sales tax for your online
to collect sales tax. If the business had a physical presence purchase, visit the Indiana Department of Revenue’s website
(warehouse, store, office, etc.), it was required to collect the to learn otherwise.
sales tax in that state. The debate today is how to handle
internet sales.

Congress has the authority to regulate interstate commerce
and could, therefore, enforce online sales tax through
legislation, but has not. For now, each state has its own set of
rules. Indiana, for instance, has agreements with about 2,000
internet companies, including Amazon, specifically to collect
sales tax from customers. It is estimated that 40 percent of the
state’s revenue comes from sales tax. Besides playing fair with
the brick-and-mortar stores that are required to collect sales
tax, states like Indiana continue to take powerful revenue hits
if online businesses are not required to do likewise as internet
sales increase.

What if you purchase a taxable item online and they do not
collect sales tax? Indiana residents are required by law to pay

We want our reputation to earn your business and our service to earn your referrals. Please pass our name
along if you know someone who needs help taking control of their financial future of tax situation.

reducing your stock allocation, or you may need more both—a blend, if you will—since timing the market can
income to cover expenses, and value stocks fulfill those be risky. If you’re an investor that leans more to the
requirements. aggressive side, then slightly overweight growth stocks.
If the opposite is true, then slightly overweight value
With the lengthy period of both economic growth and stocks.
positive stock market returns we have experienced, what
is an investor to do? In 2017, growth stocks were the Why do we call them value stocks? This is because we try
darling of Wall Street. They outperformed value stocks to purchase them when they’re trading at a lower price-
across the board. That included large-cap, mid-cap, to-earning level, whereas growth stocks are expected to
and small-cap stocks. However, in 2016, value stocks “grow” and, therefore, never go on sale. Of course, that’s
outperformed growth stocks. Therefore, it’s best to have not always true. If it were, we would all be rich!

STANDARD PRESORT
US POSTAGE
PAID

INDIANAPOLIS, IN
PERMIT NO. 937

3500 DePauw Blvd. | Suite 1035
Pyramid One, Third Floor
Indianapolis, IN 46268

317.872.5090 Phone
855.872.5090 Toll Free
317.872.5095 Fax

wefinancialadvisors.com

Out With the Old and in With the New IRA and Roth IRA 2018 Additional
Contribution Limit “Catch Up” Limit
It’s that time of year again—time to summarize all the IRS limit
changes, along with some other notable numbers. $5,500 $1,000

For 2018, 401k, 403b, 457, and SEP-IRA limits increase, while IRA, 401k, 403b, 457 $18,500 $6,000
Roth IRA, and SIMPLE IRA limits will not. If you are contributing
to one of the accounts whose limits increased, be sure to update SIMPLE IRA $12,500 $3,000
your contributions to account for the new amounts.
SEP-IRA $55,000 N/A

The maximum Modified Adjusted Gross Income (MAGI) for making Roth IRA contributions increased to $199,000 for married couples
filing jointly, with phase-out limits beginning at $189,000 in MAGI. For single and head of household taxpayers, Roth IRA contribution
limitations begin at $120,000, with total phase-out at $135,000.

Health Savings Account (HSA) contributions for individuals will increase to $3,450, and those with family plans get a boost to $6,900.
Those age 55 and up can still contribute an extra $1,000.

The annual gift tax exclusion amount increases to $15,000 for 2018—the first increase in five years. This is the amount you can gift
without filing an informational gift tax return with the IRS.

Social Security recipients will receive a 2% cost-of-living increase in their benefits for 2018. This is the largest increase in six years.

For Social Security recipients who are still working and under their full retirement age, the earnings limit will increase to $17,040. For
those subject to this limit, Social Security will deduct $1 from benefits for each $2 earned over this amount.

The maximum amount of earnings subject to Social Security tax is increasing from $127,200 in 2017 to $128,400 in 2018.