Bernardo Wealth Planning

A Contribution Instead of a Tax Bill? Did you know that Pennsylvania has a program that allows you to make a charitable contribution in lieu of paying state tax? The PA Department of Community and Economic Development administers the Educational Improvement Tax Credit Program and the Opportunity Scholarship Tax Credit Program. Originally started for businesses, the program is now open to individuals who have PA state income tax liability. Program rules and guidelines vary; the following is an example of how one aspect of the program works: A private school is connected to a Foundation (list of approved charitable foundations available on PA’s website), and a taxpayer makes a contribution to the Foundation. The Foundation grants the money to the private school the taxpayer has chosen. The private school uses the money to provide scholarships for students who would otherwise not be able to attend. The taxpayer receives a K-1 from the Foundation showing a state tax credit of 90% of the contribution made (direct credit reducing PA tax liability) and the remaining 10% is considered a charitable donation, reportable on Federal Schedule A for a taxpayer who itemizes his deductions. Pennsylvania recently expanded this program, and more charities and schools are participating. ?

Volatility is back, and we're facing tariffs and uncertainty. I wanted to take a moment to address this directly, share some thoughts on what’s happening, and discuss the short- and long-term implications. https://lnkd.in/ewfmyQ4x

Market Commentary By day count February is the shortest month of the year, however it sure did not feel that way with constant headlines out of Washington. Between tariff talk, federal layoffs, negotiating wartime agreements, and earnings seasons there was a lot to digest during the month. We have thus far continued to see strong corporate earnings and economic data but there is an inherent delay as unemployment and corporate spending are lagging indicators. With this in mind, we believe the market is anxiously waiting upcoming economic data releases to get a better understanding of both how and to what degree federal cuts, primarily as a result of the Department of Government Efficiency (DOGE), will have on the economy. **Source: Apollo – Downside Risks Intensifying (Apollo) Click BELOW to Read More. . . https://conta.cc/4boZWDa

Health Savings Accounts (HSAs) have evolved into an important planning tool. Schwab has partnered with several HSA providers so you can open a brokerage account at Schwab through your HSA. A few helpful tips to maximize your HSA: ? Contributions are tax-free ? Growth is tax-free ? Withdrawals for qualified medical expenses are tax-free ? The maximum contribution for 2025 is $4,300 for an individual and $8,550 for a family (an additional $1,000 catch-up contribution available at age 55). ? Expenses do not need to be reimbursed immediately. A receipt can be submitted years later to reimburse a medical expense. ? If someone maximizes this benefit, they will want to withdraw the full amount before passing as the account becomes taxable if inherited by a child. ? Talk to your advisor to see if you are maximizing your HSA strategy

TO ROTH OR NOT TO ROTH, THAT IS THE QUESTION. TRADITIONAL AND ROTH IRAS Both Traditional and Roth IRAs are powerful tools to help you save for retirement. While they have some things in common, the main difference between a Traditional and Roth IRA is how and when the contributions, earnings and distributions are taxed. A traditional IRA offers both a tax deduction when the contribution is made and tax-free growth. When a distribution is taken from the Traditional IRA, it is a taxable transaction. A Roth contribution, on the other hand, is not tax deductible, but the earnings and future distributions are not taxed. IRAs generally get funded in one of the following ways – direct contributions to the account, a Roth conversion/back door Roth conversion, or a rollover from an employer plan (at retirement or an in-service rollover). The question many people have is which type of IRA is best for me? As each person’s tax situation is unique, there is no standard answer to that question, and even for each person, the answer can vary from year to year depending upon income, deductions and goals. Wondering if a Roth conversion might make sense? Are you eligible for some type of IRA contribution? Should you do a backdoor Roth conversion? Contact us to talk through your situation!

January has seen continued strength from the equity markets as there has been a strong bid for stocks from both the value and growth part of the market. Since his inauguration on January 20th, Donald Trump has signed a plethora of executive orders that have thus far primarily focused on topics such as immigration and reducing the size of the federal work force, among others. While we expect these topics to remain in focus, we believe that focus will shift to economic policies in the coming months which could have a larger impact on markets. News surrounding DeepSeek’s artificial intelligence prowess brought heightened volatility. . . Click BELOW to Read More https://conta.cc/40Z7HfG

401(k) Catch up: Those 50 and older could contribute an additional $7,500 in 2023 and 2024, and they can also do so in 2025 Those 60 to 63 can contribute an additional $11,250 in 2025 in place of the $7,500 IRA / Roth Catch up: Those 50 and older could contribute an additional $1,000. Find out more at the IRS website https://conta.cc/3PMr310.

Nick Bernardo and Matt Haraburda of Bernardo Wealth, talk about what impacts if any, Deepseek has on the future of AI in the market. Watch here: https://lnkd.in/ert3BbEG

MAXIMIZING YOUR CHARITABLE GIVING IN 2025 In 2017 the standard deduction approximately doubled, meaning many taxpayers who normally itemized their deductions found it beneficial to take the standard deduction. For those who are charitably inclined, “bunching” your charitable contributions into one year (itemizing deductions), and taking the standard deduction the following year can maximize your overall tax deduction. Read more . . . https://conta.cc/3Wsjale

Nick Bernardo talks about Social Security and when you should think about taking it. https://lnkd.in/eKhAG2_F