Following favorable manufacturing and jobs reports, stocks rose Friday, extending a seven-week rally. While the data was positive, it was not strong enough to raise concerns of potential interest rate hikes. For the week, the Dow rose 1.58 percent to close at 17,792.75. The S&P gained 1.84 percent to finish at 2,072.78, and the NASDAQ climbed 2.95 percent to end the week at 4,914.54.
Six Weeks –
In the last 29 trading days since bottoming on Thursday, Feb. 11, the S&P 500 has gained 11.6 percent (total return) through last Thursday, March 24 (the stock market was closed on Friday, March 25), a result that exceeds the index’s trailing 50-year (1966-2015) average annual return of 9.7 percent (source: BTN Research).
Student Debt –
Of Americans with loan debt, 43 million have some level of student debt from attending college (source: Federal Reserve Bank of New York, BTN Research).
April Rocks -
The S&P 500 has averaged a gain of 1.88 percent (total return) during the month of April over the last 25 years (i.e., 1991-2015), ranking April as the best performing month during that period. The month of October (up 1.85 percent on average) is the second best performing month. The month of August (down 0.57 percent on average) has been the worst performing month (source: BTN Research).
WEEKLY FOCUS – Recordkeeping Guidelines
Complete, organized financial records can really simplify tax time. And keeping those records as long as you may need them can prevent future stress. Here are a few suggestions on maintenance time frames:
Three to seven years. The IRS has three years to audit a return, and you have three years to amend one. So at a bare minimum, keep your federal tax returns and supporting documents three years. But it’s best to keep this information seven years since the IRS has six years to start legal proceedings if they suspect anything more than a “good-faith error.” (The statute of limitations on a fraudulent return never expires.) A minimum of six years is recommended for self-employed taxpayers. If you claim a deduction for a bad debt or security losses, keep your documentation at least seven years. Be sure to include W-2s, 1099s, tax schedules, related bills, receipts, mileage logs, cancelled checks and proof of health care insurance. You should also keep documents for IRA distributions for seven years after the account is closed.
Four years. If you have any employees, including household help, keep employment tax records a minimum of four years after the tax is due or is paid, whichever is later.
Indefinitely. It’s actually a good idea to hold onto tax returns beyond these minimum periods since lenders and insurance companies may require them to verify income and asset value. They can also come in handy if you ever need to correct your earnings history with Social Security. Hold onto Form 8606 reporting nondeductible contributions to a traditional IRA to avoid paying tax again when you withdraw funds. And keep records of the dates you purchased stocks and mutual funds in taxable accounts and what you paid for them. You’ll need this information to determine gains or losses for taxes when you sell them. For the same reason, document the value of inherited investments at the time you received them.
If you prefer to keep electronic files, make sure they’re organized, clear and backed up. Always shred unwanted tax documents to protect sensitive information from identity thieves.
If you’d like to explore strategies to minimize your tax burden, we are happy to facilitate a joint meeting with your tax advisor. Just give us your CPA’s name, and we’ll find a time to accommodate everyone’s schedules.
The Dorion-Gray Team
Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. a Registered Investment Advisory Firm. Dorion-Gray Retirement Planning is a trade name of Dorion-Gray Financial Services, Inc. located at 2602 IL Route 176, Crystal Lake, IL 60014. Dorion-Gray and the Securities America companies are separate, unaffiliated entities.
Diversification seeks to reduce the volatility of a portfolio by investing in a variety of asset classes. Neither asset allocation nor diversification guarantee against market loss or greater or more consistent returns.
© 2013. Dorion-Gray Financial Services, Inc.