Recent tax law changes could be costing you plenty!
Do you know the most important questions you should ask your CPA before you complete another tax return or see another month go by that could be costing you extra tax dollars?
You need these questions answered now, so you can take full advantage of the new rules while you still have time left in this tax year. Here's just a sampling of the areas to discuss with your accountant and financial representatives.
Not all dividends are taxed at the new lower rates. (Do you know which assets qualify for the new rule?)
How do the new lower capital gains rates effect you? Will you have phantom income that you need to offset by adjusting your investment portfolio now?
- How to lower or eliminate your Social Security taxation now!
- Is your IRA or qualified plan being penalized and you aren't even aware of it? (One question will answer this for you.)
- Why have America's Wealthiest Investors removed their children's names as beneficiaries on their annuity contracts. (Don't worry the kids can actually get more.)
Also Learn:
- How to reduce and/or eliminate your capital gain and estate taxes.
- How to optimize the TAX FREE advantates of owning your own business.
- Reduce or eliminate unwanted required minimum distributions (RMD's) while increasing the value of your qualified plan and passing to your beneficiaries both income and estate TAX FREE.
- The most TAX and COST EFFECTIVE way to pass a business on to family members and/or the management teams, where the founder receives FAIR MARKET value for his stock and family members or management team receive funding needed to make this business purchase.
If your current financial representatives have not addressed these issues imagine what you may be missing out on.
These questions need to be discussed now, as waiting until next year means maybe paying too much tax this year. Timing is the key to using the new tax laws to your benefit. Don't wait until next spring to find out you "could have done" something to cut your taxes, now or that a hidden tax nightmare is brewing for your heirs.
Become proactive with your tax issues with our free tax review process.
A simple 10 minute review may reveal hidden wealth for you.
To learn more, call Capital Choice Advisors today or Click Here for a free, no obligation income tax review.
704-542-5499
Tax Article
To support my conviction that future tax rates will be significantly higher than they are today, I submit the following articles taken from Investors Business Daily, which reflects my views and concerns going forward.
What does this mean to you? If you are deferring taxes in a 401k plan, an IRA or any other type of qualified plan you may want to reconsider your choices before continuing on this potentially costly course.
November 2, 2005 Investors Business Daily
Math Behind Social Security and Medicare Is Enough To Make Euthanasia The Vogue
Walter E. Williams
I cringe with disgust when I hear politicians say, "We're doing it for the children." What's worse is so many Americans mindlessly fall hook, line and sinker for the hype. Judging by our actions, Americans could not care less for future generations, and future generations will curse us for it.
According to several respected authorities, including the Concord Coalition (co-chaired by former Sens. Warren Rudman and Robert Kerrey), the Congressional Budget Office, U.S. Treasury Secretary John Snow and the Social Security Administration, the estimated present value of the unfunded liability of Social Security and Medicare ranges between $61 trillion and $75 trillion dollars.
"Williams," you ask, "what's this present value business?" Simply put, between $61 trillion and $75 trillion dollars is the money that would have to be put aside right now, at current interest rates, in order to meet future obligations of Social Security and Medicare.
To put an astronomical sum like $61 trillion or $75 trillion in abit of perspective: The value of our entire national output of goods and services (GDP) in 2004 was only $12 trillion.
Congress can't put aside $75 trillion as reserves against future liabilities of Social Security and Medicare. Therefore, according to the Dallas-based National Center for Poilicy Analysis (NCPA), the annual rate of Social Security unfunded liabilities is growing at a $667 billion clip and Medicare's at $4 trillion.
What does all this mean? It means little in pocketbook terms to today's Americans who are 65 years or older. They will collect their Social Security checks and their promised Medicare benefits, but not so for future generations.
Here's the future according to House Ways and Means Committee testimony, given by Dr. John Goodman, president of the NCPA (May 2005):
By 2030, about the midpoint of the baby boomer retirement years, federal guarantees to Social Security and Medicare will require one in every two income tax dollars. By 2050, they will require three in every four. And by 2070, Social Security and Medicare will consume all federal revenues.
"In 2020, combined Social Security and Medicare deficits will equal almost 29% of federal income taxes. At that point the federal government will have to stop doing almost a third of what it does today. By 2030, about the midpoint of the baby boomer retirement years, federal guarantees to Social Security and Medicare will require one in every two income-tax dollars. By 2050, they will require three in every four."
And by 2070, Social Security and Medicare will consume all federal revenues.
There are some "optimists" who seek to minimize the pending disaster that will be caused by these and other federal unfunded liabilities. They argue that the federal government can always meet its obligations through its power to tax.
According to some estimates, by 2030, Social Security and Medicare obligations alone will require a 50% increase in payroll taxes. If tax increases are off the table, 2030 will see a 30% reduction in promised Social Security benefits and stringent rationing of health care services promised by Medicare.
There's another "solution." Even though Congress can't increase our life-expectancy, they can raise the age of Social Security and Medicare eligibility. Were Congress to make 80 as the age for Social Security and Medicare eligibility, they'd solve the problem because most of us would be dead.
Let's look at the raw politics of the Social Security/Medicare situation. Few, if any, of our 535 congressmen will be around in 2030 and later when the real crunch comes. But they are subject to today's, not tomorrow's, political pressures. Similarly, few of today's Americans 65 years of age and older will be around.
Other than mouthing a concern for future generations, both have little economic incentive to be concerned about what happens in 2030. After all, what do they have at stake? In 2030, will young people in the labor forcebe willing to see themselves taxed at Social Security rates of 20%, 30% and 40% to take care of some old people?
I don't think that will politically fly, and younger people might begin to get ideas about euthanasia.
In addition to economic strife, Social Security and Medicare are laying the groundwork for intergenerational conflict. Unfortunately, the politics of today cannot give us room to prevent these twin disasters.
