- Passive vs. Non-Passive Income: What’s the Difference?
The key to effective financial planning are two primary types of income: Passive and non-passive. It’s important to understand both passive and non-passive income types that you may have and how each type affects tax planning for improved overall financial management. By mastering these, you will be better informed to strategically plan your finances and… read more…
- What Are the Tax Consequences of Being Added to a Deed?
Property deeds are not just pieces of paper – they hold the power to impact your fiscal situation considerably. Property deeds are legal documents that provide proof of ownership. When you extend ownership rights by adding someone to your property deed, there are tax implications and potential risks associated with the transaction. A financial advisor… read more…
- The IRS Is Cracking Down on These High-Income Earners. Are You One of Them?
The IRS recently announced a major tax enforcement initiative that will increase scrutiny on high-income earners, partnerships and people with foreign bank accounts. The agency said the effort would “restore fairness to [the] tax system” by focusing on wealthy taxpayers who have seen sharp declines in audit rates over the past decade. A financial advisor… read more…
- How to Report 401(k) and IRA Rollovers on Your Taxes
Understanding the ins and outs of 401(k) and IRA rollovers isn’t a walk in the park. The maze of tax implications surrounding these rollovers might seem intimidating to many. However, deciphering the process of reporting these rollovers on your taxes is critical to maintaining the tax-deferred status of your retirement savings and steering clear of… read more…
- How Foreign Dividends Are Taxed
In today’s globalized economy, investing in foreign stocks and companies has become increasingly common for investors seeking diversification and higher returns. While these international investments can offer lucrative opportunities, they also come with a complex web of tax implications, particularly when it comes to foreign dividends. Understanding how foreign dividends are taxed is crucial for… read more…
- How Much Are Taxes on $1 Million?
Acquiring $1 million in a lump sum is no simple matter and figuring out the amount of taxes due on it is also complicated. The answer depends on several factors, including the source of the money, where you live and whether Social Security and other FICA taxes apply. Individual circumstances make all the difference. In… read more…
- Tax Planning for Ultra-High-Net-Worth Individuals and Families
Proper tax planning is essential for managing and preserving wealth. For ultra-high-net-worth individuals and their families – people with $30 million in investable assets – efficient tax management requires an in-depth understanding of tax laws, methodical utilization of tax benefits and strategic planning. The support of a specialized financial advisor is often beneficial in ultra-high-net-worth… read more…
- Do You Pay Taxes on Dividends Reinvested?
Investing in dividend stocks can create a nice stream of passive income. Instead of receiving payouts as cash, you can also use dividends to increase your holdings by reinvesting them to purchase additional shares of stock. Among other benefits, reinvesting dividends can help you avoid brokerage fees. However, even when you don’t receive dividends as… read more…
- What High Earners Need to Know for Trump-Era Tax Expirations
In 2017, the Trump administration spearheaded a comprehensive series of tax cuts. Called the Tax Cuts and Jobs Act (TCJA), the law reduced corporate taxes by about 40% and household taxes by varying degrees for most individuals. While the corporate tax cut is permanent, most of the individual tax reductions will end in 2025 or… read more…
- How Is Net Unrealized Appreciation (NUA) Taxed?
Net unrealized appreciation (NUA) tax treatment refers to the taxation of gains on employer stock within a retirement plan when the stock is moved to a taxable account or distributed as a lump sum. Rather than taxing the entire value of the stock as ordinary income, only the original cost basis is subject to income… read more…
- Common Types of Income
Have you ever wondered why some types of income are taxed more than others? Understanding the different types of income and their tax implications is key to managing your finances effectively. Whether you’re a high-earning professional or just starting your financial journey, this comprehensive guide will empower you to make more informed decisions about your… read more…
- Are You a High Earner? You Could Pay a Lot More in Taxes Under This Proposed Law
High earners could see a significant tax increase under a Democratic proposal to bolster Social Security and Medicare. A financial advisor can help you respond to potential changes to tax laws and regulations. Find a fiduciary advisor today. The proposed legislation – called the “Medicare and Social Security Fair Share Act” – would require taxpayers… read more…
- What Is Imputed Income?
Imputed income refers to the value of non-cash benefits or perks that an employee receives from their employer, which are considered a form of compensation. These benefits, while not directly paid as wages, still have monetary value and are subject to taxation. Understanding imputed income is crucial because it can significantly affect your taxable income… read more…
- Can the IRS Take Money Out of Your Bank Account?
When someone owes back taxes, the Internal Revenue Service has a few tools at its disposal to compel this person to pay. Wage garnishments are one option; bank account levies are another. Can the IRS take money out of your bank account? Yes, and it’s perfectly legal to do so. Bank account levies are avoidable,… read more…
- Tax Strategies for Short-Term Rental Properties
Renting out properties on a short-term basis can be a good way to generate an additional income stream without a significant investment of time. You can also take advantage of the short-term rental tax loophole if you meet certain requirements. This loophole is designed to extend tax benefits to investors who rent out property on… read more…
- How to Calculate Cost Basis on the Sale of Rental Property
Understanding the cost basis and how to calculate it is important for rental real estate investors. That’s because your cost basis on a property determines how much taxable profit you make when selling a profit, which can directly affect your tax liability. Calculating the cost basis starts with figuring out the cost to acquire your… read more…
- Differences Between Ordinary Income and Capital Gains Tax
The U.S. tax system distinguishes between various types of income. But the two primary categories are ordinary income tax and capital gains tax. Ordinary income tax is applied to earnings from routine activities, including wages, salaries and commissions, as well as interest from bank deposits. On the other hand, capital gains tax is levied when… read more…
- 529 Plan Tax Deductions for Every State
Opening a 529 plan is a tax-advantaged way to set aside money for college. The money you contribute can grow tax-deferred and qualified withdrawals are tax-free. While there is no federal tax break for making 529 plan contributions, you may… read more…
- Temporary Tax Plan Could Boost Your Standard Deduction By Up to $4,000
A House panel has passed a bill that would temporarily expand the standard tax deduction used by the majority of taxpayers by $2,000 per person for the next two years. The Tax Cuts for Working Families Act (H.R.3936) recently approved by… read more…
- Who Pays the Most Taxes in the U.S.?
Most income taxes in the United States are paid by the people with the most income. That is in keeping with the generally progressive nature of the individual federal income tax, the primary source of government revenues, which applies higher… read more…
- Understanding Pretax vs. After-Tax Investment Benefits
Pretax money is invested before any taxes have been deducted, while after-tax money is invested after taxes have been deducted. Investments in tax-deferred retirement accounts such as IRAs and 401(k)s are made pretax, which means there is a larger sum… read more…
- What Is an Incomplete Non-Grantor (ING) Trust?
California would like to crack down on a type of trust that lets the very wealthy avoid state income and federal gift taxes. And the Golden State is not alone: A number of state officials have taken aim at the… read more…
- Who’s Responsible for Paying Property Taxes When the Owner Dies?
When someone passes away, there can be plenty of questions over who gets what, especially if there’s a home in the mix. An often-overlooked question centers on who is responsible for paying property taxes when the owner dies. A delinquent… read more…
- IRS Fresh Start: Tax Repayment Options
If you owe federal income tax and can’t pay in full, the IRS Fresh Start program can help you get caught up. Fresh Start was established by the federal government in 2011 to offer some relief to taxpayers and curb… read more…
- What Happens To Your Tax Liability With Proper Financial Planning?
Taxes are unavoidable but that doesn’t mean you have to pay more than you owe. What happens to your tax liability with proper financial planning? The simple answer is that it can allow you to minimize what you owe while… read more…