Wealth Management Newsletter: New Tax Issues
To recap wealth management and tax issues for the year 2010, we experienced a short-lived repeal of the federal estate tax. I think that most people were patiently waiting for Congress to take over and reinstate the tax policy, hopefully not holding their breath as we haven’t seen the return of the tax until the beginning of this year.
The current tax details revert back to the same statistics of the 2001 federal estate tax, a 1 million dollar range and a tax rate cap of 55 percent – not factoring additional legislation that may be passed in the future. This has left some Americans puzzled, as it leaves confusion for those trying to review an estate plan adapted to the formerly known plan terms.
To cover some of the more critical opportunities rising from the reinstated federal tax this guide will point out the changes and uncertainties that some property owners may encounter during the new years to come. Of course, majority of claims will have to be reviewed on a unique case-by-case basis according to the individual’s situation, but this information will help you know what to ask when discussing the matter. Now is as good a time than any to start considering potential for tax-planning strategies and how it could impact your family and community.
First thing to point out is that, as opposed to years prior, Roth IRA conversions play a marginally more important role this year. The reasons why include things like income limits being eliminated for eligible cases in making Roth IRA conversions. Some key reasons for considering Roth conversions could be the ability to steer clear of mandatory distributions from 401K and retirement accounts during your lifespan or being able to pass a portion of your yearly assets to your beneficiary tax-free. Another big difference this year is the opportunity for property owners to payout their fees in full or in payments spread out equally over the years 2011 and 2012. In whatever case your in, these abilities may or may not benefit your personal gain or well-being so consider the odds.
There is a list of altered changes in the 2011 estate tax; marginal income tax rates are broke down into six phases now, the lowest bracket no longer exists. Long-term capital gain has been modified as well, for instance if you were to sell a capital asset from last year such as company stock, it will automatically be considered a capital gain – being taxed from 0% to 15% depending on your tax bracket.
If there is one thing we can depend on going unchanged it is that we will never be able to predict exactly what Congress will do. But by staying educated and up-to-date on new legislation as well as factoring in what we’ve seen in recent years we can still manage to conform to the extremities safely.
Forrest Hollaway is a founding member of Crash Proof Prosperity, dedicated to assisting others in creating wealth. They are revealing their secrets of true wealth accumulation that only the privileged had previously had access to. To Tap into the Most Anticipated Wealth Creation Program ever developed visit CrashProof Prosperity.
To Tap into the Most Anticipated Wealth Creation Program ever developed visit CrashProof Prosperity.
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