TTC_03_31_21_Vol.17-No.23

Page 6 www.TheTownCommon.com
March 31, 2021
Community News
Community Announcements,
from page 5
Tax Filing Time
Is A Good Time
To Look Ahead To
Next Year
By Jim Braun
With tax time upon us, one message
we keep hearing is that you
should file as early as possible.
You may recall that last year
there were numerous delays in
getting tax refunds after the pandemic
caught everyone, including
the IRS, off guard. If you have a
refund coming, the sooner you file,
the sooner that refund will make
its way into your bank account.
If you’re like most Americans,
you also want to do everything you
can to reduce your overall tax bill.
We all understand that taxes are
needed to run the government, but
there’s no need for you as an individual
to pay more than you owe.
Let’s face it, though. It’s a little
late in the game to put into play
most steps that can help you reduce
your 2020 tax bill. You really
need to have done whatever you
were going to do before the end of
the tax year.
But now is definitely a good
time to start thinking about ways
you can improve your tax situation
for next year. Here are a few areas
to consider or understand as you
do so:
• Funding tax-preferenced accounts.
One way to save on taxes
is by putting money in a variety of
tax-preferenced savings accounts
such as an IRA, a 401(k), and others.
Depending on the account,
you can deduct your contribution
each year, defer paying taxes on
growth, or take withdrawals tax
free. In at least one case – health
savings accounts – you can do all
three. Since an HSA gives you
that triple whammy of tax avoidance,
it’s definitely something you
want to consider. although there
are eligibility requirements you
need to meet. Also, unlike retirement
accounts, an HSA can only
be used for medical expenses. With
a traditional IRA or a Roth IRA,
you don’t get that triple whammy
that comes with an HSA, but there
are still significant tax advantages.
With a traditional IRA, you
don’t pay taxes on your contributions,
and you defer taxes on the
account’s growth. You do pay taxes
on withdrawals you make in retirement.
A Roth IRA has different
advantages. You can’t deduct your
contributions now, but your money
grows tax free and you aren’t
taxed when you make withdrawals.
• Using a 529 for K-12 private
education. Many people are familiar
with 529 plans, but often they
think of these solely as a way to
save for a child’s college education.
But a 529 can also be used to pay
for private school in elementary
and high school if you so desire.
The big tax advantage with a 529 is
that you don’t pay federal income
taxes on the account’s growth, but
you must spend the money on
qualified educational expenses and
nothing else. That last point is important
to remember and understand
because if you use the money
for other reasons, you will pay taxes
on that withdrawal and you will
also pay a penalty. A 529 account
is definitely something to consider
if you have children or grandchildren
and want a tax-efficient way
to save either for K-12 or college
educations.
• Making charitable contributions.
Charitable contributions
are a powerful tool for reducing
your tax bill, and they come with
the added bonus of allowing you
to make a positive impact in your
community or the world. What
could be better? Through charitable
contributions, you can
reduce your income tax, your
capital gains tax, and your estate
tax. Some people view this in the
most straightforward way – you
choose a worthy cause that qualifies
under the tax rules, and you
write a check. But there are other
tax-advantaged ways to approach
charitable giving. Here’s just one
of many examples: You can establish
a donor-advised fund, which
is a personal charitable account
opened in the name of one or
more donors and held in custody
by a nonprofit organization.
How does that work? Let’s say
you sell a stock and, instead of
paying the capital gains tax, you
place the proceeds in a donor-advised
fund. You can claim the full
amount as a charitable deduction,
but you don’t have to donate the
money all at once. The money
remains in the fund and can be
donated in small amounts over a
period of years. All the while it is
drawing interest.
These are just a few examples of
strategies you can consider as you
seek ways to reduce that tax bill.
Certainly, all of this is complicated,
but your financial professional
should be able to help you work
your way through the IRS weeds
and find what works best for you
and your personal situation.
Your future tax-filing self will
thank you.
Community Announcements,
page 7
By J. Peter St. Clair, DMD
The word is out – taking care of
your oral health is better for your
whole body, including your mind.
However, statistics still indicate
only about half of the population
goes on a regular basis. For those
that do go, most patients usually
stay with a dentist unless there is
some kind of personality conflict
or philosophical discrepancy in
the perceived need for treatment.
How do you know if another
opinion is right for you?
When it comes to larger purchases,
such as a car, a house or
even home improvements, it’s not
uncommon to get a second or
Brighter smiles ...
third opinion/quote. We use the
information we gather to make
a more informed decision about
where and what we are going to
spend our money on.
When it comes to our health,
it usually depends on the nature
of the issue. More complex issues
in medicine, such as a diagnosis
of cancer, an unknown diagnosis,
or other major medical issues in
which we have to make decisions
about significant treatment, tend
to stimulate people to get more
than one opinion.
Routine dental care is generally
not that complicated. However,
there are many different ways to
do the simplest things in dentistry.
The method is a function of
the dentist’s beliefs and training.
It is relatively uncommon for a
patient to get a second opinion
for this type of maintenance dental
care. Although there is some
subjectivity as to what different
Find Your Dental Home
dentists might deem as “needing”
to be done, patients usually base
their decision on their perceived
need. Often times, this perception
of need comes from the dentist’s
ability to communicate the reasons
for treatment.
The patient’s trust in their provider
is a big factor. If a patient
trusts and genuinely likes their
dentist, they may not necessarily
do or want to do what the dentist
wants them to, but they are comfortable
enough with the relationship
to make the decision without
the need for another opinion. It is
when there is a lack of trust, a personality
conflict, or the inability
of the dentist to properly communicate
with the patient effectively,
that often stimulates the desire for
another opinion.
Another important factor,
which falls in the communication
area, is that the patient is given
choices. Patients always have the
right to choose what treatment
they feel is right for themselves.
If choices are given and the treatment
is effectively communicated
to the patient, they have a better
ability to decide on the direction
to proceed that is right for them.
If a dentist presents treatment options
and the patient decides to
do nothing, that is the patient’s
choice. It is when treatment presented
aligns with the patient’s
perception of need or desire, that
the patient moves forward with
treatment.
Fees tend to be a less common
reason for patients to seek another
opinion. Fees for treatment can
definitely vary between dental offices.
The problem with seeking
treatment based on fees is that the
same treatment in two different
offices with different fees can also
vary in the level of expertise and
precision in which it is done. As
a consumer, you have very little
control in your ability to evaluate
this.
You do have the ability to know
whether you feel comfortable to
make an informed decision. Regardless
of the situation, if you
need more information to make
the best decision for yourself, get
more information. If you feel pressured
to make a decision, don’t
make it until you feel comfortable.
The doctor-patient relationship
should be an open two-way
conversation. Find your dental
home…..and stay there.
Dr. St. Clair maintains a private
dental practice in Rowley and Newburyport
dedicated to health-centered
family dentistry. If there are
certain topics you would like to
see written about or questions you
have please email them to him at
jpstclair@stclairdmd.com. You can
view all previously written columns
at www.jpeterstclairdentistry.com/
blog.