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Newsletter: March 2021

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Lake Nagog, adjacent to Colman Knight office in Acton, MA,
on March 17, at 5:30PM. Evenings are longer and ice is melting!
This month:

 

  • Vanishing Bank Branches
  • Tax Tips & Changes
  • Inner Money Map: Exploring PRIDE

 

Vanishing Bank Branches

 

As technology continues to evolve, and online banking – including mobile devices – become the routine, we wonder about your experience with banking. Long gone are the days of standing in line to visit your favorite teller in person. The decline of brick-and-mortar bank branches is very real and following the natural progression of an electronic world. How has this transition affected you? Do you miss a visit to your bank? Have you rarely or ever stepped inside a bank? What’s true for you and why does this matter? Read on for a few facts, views and contemplation.

 

It is becoming increasingly hard to find a convenient local bank branch. The advent of online banking has created the ability to deposit checks through an app and earn significantly higher interest on deposits. However, if you prefer to bank in person, the opportunity to do so is becoming less and less.

 

In 2020, there was a loss of 2,788 bank branches around the United States. In 2019, the US banking industry experienced a net loss of 1,630 locations. From 2013 through 2018, the net losses were 1,030, 1,645, 1,480, 1,742, 1,921 and 1,571, respectively.

 

Note that nearly 50% of traditional branch banking activity can be conducted online today, and digital-savvy customers have never seen the need to visit a bank office. Not surprisingly, the banking giants, who built their companies on brick-and-mortar convenience, are struggling to meet the competition. Since January of 2011, Wells Fargo’s stock price performance has lagged the S&P 500 by 193%, while Citigroup’s stock has underperformed by 160% and U.S. Bancorp stock by 115%.

 

This trend gives the traditional banking industry an opportunity to keep what is working from traditional banking and shift business to current electronic systems, an obvious way of working in our global banking. China may offer a future view where 81% of smartphone users have adopted mobile payments. We can imagine a new currency structure when visiting a bank branch and holding physical cash will be remembered how we now remember rotary phones.

 

If these trends are our current reality, how are you navigating these changes? What technology would be helpful for you to learn, or improve? As we know with the cycle of creation, we are always creating, sustaining and destroying. What needs to be let go and what needs to arrive in your banking systems? How can we assist you with your journey?

 

Source:

 

 

Tax Tips

 

It is the season, and Shaohui and Rich are tax, tax, tax. We appreciate your timely delivery of documents and prompt responses to our questions. It is our pleasure to assist you in meeting your tax obligations.

 

As we communicated to clients who had PPP loans forgiven, MA is in the process of legislating to make these loans non-taxable. If you got loan forgiveness in 2020, you will want to extend until this law is officially adopted.

 

Other tax facts and changes of interest:

 

Tax brackets for 2021
  • The income tax brackets for 2021 are only slightly wider than for last year because of inflation during the 12-month period—from Sept. 2019 through Aug. 2020—used to figure the adjustments. Tax rates do not change.
Marrieds: If taxable income is
Not more than $19,900
Over $19,900 but not more than $81,050 Over $81,050 but not more than $172,750 Over $172,750 but not more than $329,850 Over $329,850 but not more than $418,850 Over $418,850 but not more than $628,300 Over $628,300
Singles: If taxable income is
Not more than $9,950
Over $9,950 but not more than $40,525
Over $40,525 but not more than $86,375 Over $86,375 but not more than $164,925 Over $164,925 but not more than $209,425 Over $209,425 but not more than $523,600 Over $523,600
The tax is
10% of taxable income
$1,990 + 12% of excess over $19,900
$9,328 + 22% of excess over $81,050
$29,502 + 24% of excess over $172,750 $67,206.00 + 32% of excess over $329,850 $95,686.00 + 35% of excess over $418,850 $168,993.50 + 37% of excess over $628,300

 

The tax is
10% of taxable income
$995 + 12% of excess over $9,950
$4,664 + 22% of excess over $40,525
$14,751 + 24% of excess over $86,375 $33,603 + 32% of excess over $164,925 $47,843 + 35% of excess over $209,425 $157,804 + 37% of excess over $523,600
RMD Age
  • IRAs and other retirement plans now have age 72 for required minimum distributions. It used to be 70½.
Standard Deduction going up for 2021
  • Married couples get $25,100 plus $1,350 for each spouse age 65 or older. Singles claim $12,550…$14,250 if 65 or up.
Estate & Gift Tax
  • The lifetime estate and gift tax exemption for 2021 jumps to $11,700,000. The estate tax rate remains steady at 40%.
  • The gift tax exclusion remains $15,000 per donee. You can give up to $15,000 ($30,000 if your spouse agrees) to each child, grandkid or any other person in 2021 without having to file a gift tax return or tap your lifetime estate and gift tax exemption.
Charitable Deductions
  • Nonitemizers can write off up to $300 of charitable cash contributions, $600 if married.
Our Favorite
  • A nice surprise for businesses—in 2021 and 2022, they can deduct 100% of business meals (up from 50%), as Congress wants to encourage more restaurant dining. This includes client meals as well as meals for employees on business travel. Note that this easing does not apply to 2020.
As always, we will keep you posted on changes that affect you. Let us know how we can help.

 

March’s Inner Money Map exploration focus:

Pride

 
Enter into discovery about Pride, in this month’s video teaching with Gayle.

 

“There are two kinds of pride, good and bad. Good pride represents our dignity and self respect. Bad pride is the deadly sin of superiority that reeks of conceit and ignorance.”
~ John C. Maxwell
Year of Wealth - Inner Money Map: Introducing Pride

 

For an audio experience, click below for a Tiny Somatic Practice with Gayle.

 
INNER MONEY MAP GROUP EVENT: Thurs. 3/17 at 3PM ET

 
Creative Play: Draw Your Card

 

Come play with us online!

 

Bring coloring pens or pencils, a small index card or cut paper and your childlike curiosity. We will begin with a brief centering practice, settled into our body we will create our card, then close with an expression of our experience and reveal of our card.

 

Our cards are a friendly reminder of the mindstate we are exploring on the Inner Money Map. If you’d like to participate in the 20-30 minute circle, click below to join the Facebook group. You’ll see the event listed in the group (or here). Email Emily (joy@colmanknight.com) or call 978-371-2015 if you need any help. You do have to be on Facebook to join the event.

 

 

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