As Seen In:

Oaktree Financial Advisors Blog

Got Kids in Private School? Don’t Forget This Little-Known Tax Deduction

on .


If you send your kids to private elementary or high school or homeschool them, there's an Indiana tax deduction that you should use. You can deduct $1,000 per dependent child.

This is a deduction, not a tax credit.  A deduction reduces your taxable income, before calculating state and local tax. So, a $1,000 reduction in taxable income, saving state tax at a 3.4% rate and county tax at an average of 1.0% to 1.62% rate will save you $44 to $50 per child. Not huge but it keeps your money in your pocket. The more times you can do that the better off you're going to be.

Private School/Homeschool Deduction 626

You may be eligible for a deduction based on education expenditures paid for each dependent child who is enrolled in a private school or is homeschooled.

Dependent Child Qualifications

• Your dependent child must be eligible to receive a free elementary or high school education (K-12 range) in an Indiana school corporation;

• You must be eligible to claim the child as a dependent on your federal tax return; and

• The child must be your natural or adopted child or, if not, you must have been awarded custody of the child in a court proceeding making you the court appointed guardian or custodian of the child.

Spring Forward and its Powerful Effect on Your 401(k)

Written by Ed Snyder on .


This weekend most of the nation will move their clocks forward one hour to adjust for daylight savings time; what we call "spring forward". I would like to suggest that you use this as a reminder to spring forward your 401(k) contributions and increase the amount you are contributing. When was the last time you increased the percentage that you are contributing to your 401(k)? Work retirement plans like 401(k)s are usually set up so your contribution is taken as a percentage of your salary. For example, if you make $50,000 and elected to contribute 5% to your 401(k) plan, your contributions will add up to $2,500 per year. A contribution increase would mean you decide to contribute a larger percentage of your income.

Because most companies do not offer pensions anymore and you cannot rely on Social Security to provide a major portion of your retirement income, more of the responsibility of providing yourself a retirement income falls on you. Most workers need to increase the amount they contribute to their 401(k) plan over time in order to reach their retirement goals. Many workers contribute a small percentage of salary early in their career when they have a smaller salary. But as their career progresses and their salary increases, they can afford to make larger contributions.

Two Things You Must Do With Your 401(k)

on .


Don't go on autopilot – go on auto increase

When employees contribute to their 401(k) plan, the money goes into the plan directly before the employee ever receives the money. It's easy to lose track of how much is being contributed. Too many times the initial contribution percentage is chosen arbitrarily and is not updated. Years can go by without any changes to the percentage that is being contributed. The maximum that can be contributed to a 401(k) for 2015 is $18,000. Employees age 50 or older can contribute an additional $6,000 for a total of $24,000. If you are not contributing the maximum allowed you should elect the auto increase option for your 401(k) contributions. With this option you choose your starting contribution rate, the annual increase percent and the target rate. Your 401(k) contribution will automatically increase by the chosen annual increase percent every year until the target rate is reached. This will help you to increase your savings without having to remember to do it every year.

Got a Roth 401(k)?

Qualified distributions from a Roth 401(k) may be taken tax free. A withdrawal is considered qualified when it is made after the account holder has attained age 59 ½ and a minimum of five years have elapsed since January 1 of the year of the first contribution to the Roth 401(k) account.

Here's the catch. After you retire or otherwise leave the employer, if you rollover your Roth 401(k) to a Roth IRA the time during which the assets were in the Roth 401(k) does not count toward the Roth IRA's five year holding period.

The five-year holding period is never carried over to an individual Roth IRA upon rollover from a Roth 401(k). The Roth 401(k) funds will be governed by the five-year rule applicable to the Roth IRA. If the Roth IRA has already satisfied the five-year period, then the funds that were rolled over from the Roth 401(k) are deemed to have also met the five-year period, even if they were in the Roth 401(k) for only a year. This is why, if you choose to participate in the Roth 401(k), you should also consider establishing a Roth IRA as soon as possible either through contributions or a conversion if ineligible to contribute due to the income limits.

How Do I Claim My Tax Credit For My 529 Contributions?

on .


Indiana residents who contributed to the CollegeChoice 529 last year need to remember to claim the tax credit on their 2014 Indiana income tax return. It is important to remember to claim the credit as there are no tax forms sent out reporting your contributions.

Your contributions are reported on Schedule IN-529 and then the allowable credit calculated on that form will carry over to Schedule 2: Indiana Credits. Complete details can be found on the Indiana Department of Revenue's website.

Image courtesy of Stuart Miles at

Four Things You Should Do When You Receive Lilly Equity Awards

on .

*Oaktree Financial Advisors is neither endorsed by nor affiliated with Eli Lilly

If you are an Eli Lilly employee you have received your 2015 equity awards if you have any vesting this year.  Equity awards, including restricted stock units, performance awards and shareholder value awards are paid out in late January/early February each year.  The stock awards, net of shares withheld for taxes, are paid into your Merrill Lynch brokerage account.  Some things to consider with these awards include the following:

  1. Decide if you want to continue to hold the Lilly stock or sell it.  Once the shares are deposited into your account you can sell the shares at any time.
  2. Decide what to do with the cash that accumulated from the stock dividends. If you had restricted stock units vest there will be cash for the dividends during the vesting period, in addition to the Lilly stock, deposited into your account. This cash just sits there and earns nothing so you may want to consider other options for this money.
  3. Make sure ownership of your account is set up appropriately. The Merrill Lynch account that your stock is deposited to is titled as an individual account. This means that if you are married and you pass away, the assets will be frozen until the probate process is completed.  Most people, if married, should consider moving these assets into a joint account.
  4. Determine how big a part of your overall investments the Lilly stock is. In general you don't want to have one individual stock represent more than 10% of your entire investment portfolio. However, when we are talking about your employer's stock, 5% is probably a better recommendation. Why the difference? Because if the company stock is down, the same issues causing the stock to sag may also cause employees to lose their job and income.

Equity awards are a valuable part of your compensation. Treat them as such and take the time to make sure that you are making the best decisions so that they can provide you and your family with the most benefit possible.

Request a FREE consultation: Click Here