CommentaryOctober 2018 Commentary

Are You a Giver?

While some of us are living in very good economic times, there are still many causes that need funding to make the world better.  From cancer research to the arts and from children in poverty to the needs of the aging population- there is so much that needs to be done.  We are thrilled that so many of our clients want to make a difference- and we love to help them.  There are lots of ways to contribute, and we thought we’d share them with you here.  Please remember to talk to your tax advisor before taking action on any of these ideas.

Last year, the tax law changes at the end of the year increased the standard deduction, so that many people who were making smaller charitable deductions in relation to their income may not be itemizing and therefor not be able to deduct them specifically any more.  A strategy we’d suggest considering is to “bunch” your charitable contributions in one year (say every other year or every three years), which depending on the size, may allow you to have more deductions than the standard deduction in any given year.  The income isn’t as steady to the charity, but they still get the same amount of money.

For larger donations, another option you may have is to donate appreciated stock, bonds or mutual funds instead of cash.  By donating the investment directly, you can pass on the same value of your cash donation without having to pay the capital gains tax on the investment. This strategy generally only makes sense if the charity can receive such gifts and they are larger amounts.  The hassle for a donation of a few hundred dollars is rarely worth it.

For those over the age of 70 ½, you can also donate up to $100,000 of your Required Minimum Distribution from your IRA directly to the charity.  While you again want to make sure the charity can accept these types of gifts, this is potentially a great way to lower your taxable income.  Please remember that Roth IRAs are not federally taxable, and unless they are inherited Roth IRAs, do not have an RMD.  These are generally not advantageous assets to give to charity, if you have a choice.

Don’t rule out donations of personal property.  In the last few years, we’ve seen clients benefit from donating cars and collections (art, jewelry or wine, for example) that can be sold or used by the charity.  This can ease the burden of getting rid of unwanted property dramatically.  This kind of gift can be disappointing, as you may not get what you think you will for the deduction depending on how the charity can use it.  Make sure you get good advice before doing it, but it’s certainly worth thinking about.

Finally, don’t overlook one of Kansas City’s treasures: The Greater Kansas City Community Foundation.  You can set up a donor advised fund at GKCCF and donate in any given year, giving you a charitable checking account that you can use at any time, as long as there are funds in the account.  GKCCF can accept gifts besides cash and can take a large donation in any given year that would allow you to parcel it out slowly over time to multiple charities. This allows lots of control for you.  There are, of course, fees to do this, but we think they can often be worth it.  The Planned Approach accepts no compensation from GKCCF, but we do love what they can do for our clients.

Finally, remember good tax planning- especially charitable planning, happens before December 31st each year.  Don’t wait until the last minute and if you are giving significant amounts, consider a planned strategy.  And always, always, get your tax advisor involved!


Americans gave $410.02 billion to charity in 2017, crossing the $400 billion mark for the first time. (Giving USA)




By Kelly Hokanson, CFP®

Tis’ the season.  No, not Christmas quite yet (although blink and that will be here).  A much less favorably anticipated season, but one that can be beneficial for those with students heading off to college.  We’ve compiled a few pointers that we think will be helpful for those starting the task:

  • Make sure you are on the correct website- The FAFSA is FREE to fill out, but there are a lot of copycat websites.
  • Use Next and Previous buttons- don’t use the back and forward arrows or you will be logged out and lose data.
  • Do not leave any answers blank- enter 0 if you don’t have anything to enter.
  • Make sure that both student and parent sign at the bottom, then submit. You will see a confirmation page once it is successfully submitted.
  • Answer “yes” when asked about work study. It doesn’t obligate you to actually do work study but gives you the option down the road if you choose to go that route.
  • Assets in student’s names are assessed at a rate of 20%- parents are assessed at 5.64%. 529s are assets that are assessed as the parent’s, but UTMA and UGMA are assessed as the child’s.  There is no lookback, so assets can be moved at any point before the FAFSA is filled out (consult with your advisors with any questions about this strategy).
  • Value of a small business. If the family business is less than 100 employees, you can enter $0 for this question. You only have to provide a value for businesses with more than 100 employees.
  • You do NOT have to include qualified assets (401ks, etc) on the FAFSA. Including a large 401k could disqualify a student who may have otherwise qualified.

As always, if you have questions, we’re here to help!


“One of the serious obstacles to the improvement of our race is indiscriminate charity.” ~ Andrew Carnegie



Market Update: More of the Same

9-30-18 YTD Dow 8.8%
9-30-18 YTD S&P 500 10.6%
9-30-18 YTD World EX US All Cap -1.7%
9-30-18 YTD US Agg Bond -1.6%

Since the quarter end returns have come out at the end of last month, we’ve seen quite a bit of volatility.  One client asked, “I know I shouldn’t worry, but can you tell me why it’s doing this?”  There are many things that could be contributing to the ups and downs- interest rates rising, trade negotiations, electronic trading, and the slowing of corporate buy backs could all easily be listed.  But the real answer is that when the market goes down, there are more sellers than buyers.  When the market goes up, there are more buyers than sellers.  Anything more than that is speculation on any combination of factors that may or may not be playing into the day to day fluctuations of the market.  In our opinion, there is no way to time the market, so we just encourage those we work for to prepare for the inevitable ups and downs in the short term and invest for the long term.  As a side note, we think that the FED raising interest rates is a way of preparing for the next economic downturn.  The higher the rates get, the more powerful the tools are for the FED to use to stimulate the economy in a downturn.  Having an umbrella for a rainy day can help a person stay dry.







The views expressed represent the opinion of The Planned Approach. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. While The Planned Approach believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and The Planned Approach’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties.
The Planned Approach, Inc.

420 W. 98th Street
Kansas City, MO 64114
(816) 941-0098

Our Disclosures/CRS FORM
The Planned Approach, Inc.

420 W. 98th Street
Kansas City, MO 64114
(816) 941-0098

Our Important Disclosures

Insights for Your Life Stage

The Planned Approach, Inc. is an Investment Advisor registered with the Securities and Exchange Commission. No client or prospective client should assume that any information presented or made available on or through this website, is a receipt of, or a substitute for personalized financial planning consulting advice. Financial planning consulting advice can only be rendered after the following conditions are met: 1. Delivery of our Form CRS, Form ADV Part 2A and 2B to you; 2. Execution of an Investment Advisory and/or Financial Planning Engagement Letter between us. You may obtain a copy of our ADV Part 2A Disclosure Brochure containing similar information by sending a written request to The Planned Approach, Inc., 420 W. 98th Street, Kansas City, MO 64114. Additionally, please note that hyperlinks included throughout this site are provided as a matter of convenience and we disclaim any and all responsibility for information, services or products found on websites linked hereto. Please contact the firm for further information. The Planned Approach, Inc. is not engaged in the practice of law and does not provide legal advice. Always consult with an attorney regarding your specific legal situation. The Planned Approach, Inc. is not engaged in the practice of tax consulting. Always consult with your tax advisor regarding your specific tax situation.