-Marginal Tax Rates: Recent tax reforms have led to changes in marginal tax rates. As an investor, understanding how these rates affect your income and investment returns is crucial.
-Strategic Income Timing: Consider adjusting your income realization strategy to minimize tax liability. For instance, delaying capital gains until lower tax years can be advantageous.
-Tax-Efficient Investments: Focus on tax-efficient investments, such as index funds or tax-managed portfolios. Minimize taxable events like short-term capital gains.
-Asset Location: Allocate assets strategically across taxable, tax-deferred, and tax-free accounts. Optimize tax efficiency by placing high-yield investments in tax-advantaged accounts.
-Harvesting Losses: Regularly review your portfolio for tax-loss harvesting opportunities. Offset gains with losses to reduce your tax bill.
-Roth Conversions: With tax rates in flux, evaluate Roth conversions. Converting traditional IRA funds to Roth IRAs can provide tax-free withdrawals during retirement.
-Required Minimum Distributions (RMDs): Stay informed about RMD rules. Changes in RMD age or withdrawal percentages can impact your retirement income and tax obligations.
-Social Security Taxation: Understand how Social Security benefits are taxed. Proper planning can optimize your overall tax burden.
-Lifetime Gifting: Take advantage of increased gift tax exemptions. Consider transferring wealth to heirs tax-efficiently during your lifetime.
-Estate Tax Provisions: Stay informed about estate tax thresholds and exemptions. Proper estate planning can protect your legacy and minimize tax consequences.
-Charitable Giving: Explore charitable strategies like donor-advised funds or qualified charitable distributions (QCDs) to reduce taxable estate values.
Staying informed and proactive in response to tax changes is vital for securing your financial future. Regularly review your financial plan, stay informed about tax laws, and work closely with financial advisors to navigate these changes effectively. Proactive tax planning can lead to better financial outcomes.
Our team of financial planners and financial advisors are well versed and have the resources to help you with all of these things. We are here to help.
Your Wela Financial Advisory Team
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Brent Forrest & Associates, LLC. dba Wela Financial Advisory (Wela) is a registered investment adviser. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. This article and images may have been enhanced with the assistance of artificial intelligence (AI). Brent Forrest & Associates, LLC dba Wela Financial Advisory( Wela) is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance. Wela may discuss and display, charts, graphs, formulas which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graph offer limited information and should not be used on their own to make investment decisions.
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