Benjamin Franklin said, "There are only two certainties in life - death and taxes. There's not much we can do to avoid death, but there are strategies you can implement to minimize your exposure to taxes.
If you have a 401(k), 403(b), IRA, or other qualified retirement account, you're probably familiar with the power of tax-deferral. In a tax-deferred account, you don't pay taxes on gains as long as the funds stay in the account. By not paying taxes each year, your assets may compound at a faster rate than they would in a similar taxable account.
A 401(k) or similar qualified retirement plan is a great way to achieve tax-deferred growth, but it's not the only option. There are other vehicles that could allow you to take advantage of tax-deferral, including:
Tax-deferral can be an effective way to build retirement assets and minimize your current-year tax obligations.
There are also strategies that allow you to generate tax-free income in retirement. One is by using a Roth IRA. In a Roth IRA, you get no tax deductions for your upfront contributions. Your assets grow tax-deferred while inside the account. And then, after reaching age 59 1/2 and assuming the account is at least five years old, you can take tax-free distributions from the account.
Not everyone is eligible to contribute to a Roth IRA based on income. However, you may be able to conduct a Roth conversion, essentially converting 401(k) or traditional IRA assets into a Roth. This isn't right for everyone but can be effective in certain situations.
Other tax-free strategies may include municipal bonds, life insurance, and other vehicles.
If you have investments in a taxable account, capital gains are likely a part of your tax picture. A capital gain on an investment that was held longer than one year. Capital gains are taxed at a different rate than income.
Income | Capital Gains Rate |
---|---|
$0 - $40,000 | 0% |
$40,001 - $441,450 | 15% |
$441,451 and up | 20% |
Income | Capital Gains Rate |
---|---|
$0 - $80,000 | 0% |
$80,001 - $496,600 | 15% |
$496,601 and up | 20% |
We use advanced planning to manage your income taxes and capital gains taxes to minimize your tax rate and your overall tax exposure. That could include managing the sale of assets or perhaps even harvesting losses to offset gains. The strategy depends on the client, but any investment strategy should include consideration of capital gains and investment income, and how they may impact performance.
Taxes are a substantial expense for most people, so tax management should play a role in any comprehensive financial strategy. Our team can help you analyze your tax exposure and make informed financial decisions that consider tax consequences.
If you have a 401(k), 403(b), IRA, or other qualified retirement account, you're probably familiar with the power of tax-deferral. In a tax-deferred account, you don't pay taxes on gains as long as the funds stay in the account. By not paying taxes each year, your assets may compound at a faster rate than they would in a similar taxable account.
A 401(k) or similar qualified retirement plan is a great way to achieve tax-deferred growth, but it's not the only option. There are other vehicles that could allow you to take advantage of tax-deferral, including:
Tax-deferral can be an effective way to build retirement assets and minimize your current-year tax obligations.
There are also strategies that allow you to generate tax-free income in retirement. One is by using a Roth IRA. In a Roth IRA, you get no tax deductions for your upfront contributions. Your assets grow tax-deferred while inside the account. And then, after reaching age 59 1/2 and assuming the account is at least five years old, you can take tax-free distributions from the account.
Not everyone is eligible to contribute to a Roth IRA based on income. However, you may be able to conduct a Roth conversion, essentially converting 401(k) or traditional IRA assets into a Roth. This isn't right for everyone but can be effective in certain situations.
Other tax-free strategies may include municipal bonds, life insurance, and other vehicles.
If you have investments in a taxable account, capital gains are likely a part of your tax picture. A capital gain on an investment that was held longer than one year. Capital gains are taxed at a different rate than income.
Income | Capital Gains Rate |
---|---|
$0 - $40,000 | 0% |
$40,001 - $441,450 | 15% |
$441,451 and up | 20% |
Income | Capital Gains Rate |
---|---|
$0 - $80,000 | 0% |
$80,001 - $496,600 | 15% |
$496,601 and up | 20% |
We use advanced planning to manage your income taxes and capital gains taxes to minimize your tax rate and your overall tax exposure. That could include managing the sale of assets or perhaps even harvesting losses to offset gains. The strategy depends on the client, but any investment strategy should include consideration of capital gains and investment income, and how they may impact performance.
Taxes are a substantial expense for most people, so tax management should play a role in any comprehensive financial strategy. Our team can help you analyze your tax exposure and make informed financial decisions that consider tax consequences.
All Rights Reserved | Aspire Wealth Management
Different types of investments involve varying degrees of risk including market fluctuation and possible loss of principal value. There can be no assurance that any specific investment strategy will be profitable. Our firm is not affiliated with the US Government of any governmental agency. Please visit www.ssa.gov for guidance on your individual situation. Our firm does not provide legal tax advice. Please consult a tax and/or legal professional for guidance with your individual situation.
Securities offered only by duly registered individuals through Berthel Fisher Company, LLC (BFC), member
FINRA/SIPC. Investment advisory services offered only by duly registered individuals through Aspire Wealth Management, LLC, a Registered Investment Adviser. Insurance offered through Aspire Wealth Management, LLC. BFC and Aspire Wealth Management, LLC are not affiliated companies.
Tax services are offered through Aspire Tax Center. Berthel Fisher Company, LLC and Aspire Wealth Management, LLC do not offer tax or legal advice.
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