Published Tuesday, Sept. 15, 2020; 10:30 PM EST
(Tuesday, Sept. 15, 2020; 10:30 PM EST) As a professional advisory firm, perhaps the most job important service we provide is as a "choice decider," someone you can rely on to prioritize your best choices for building your wealth and planning your future.
As a financial choice decider, it's important to tell you that perhaps the very best choice you could make right now is to pay attention to tax planning opportunities, and to show you choices you must make by the end of 2020.
Amid the stock market's headline-grabbing gyrations and record-setting performance, focusing on tax planning may seem counterintuitive but it's a strategic imperative. Here are three examples of potential tax problems that could arise and for which you need to be prepared before the end of the year:
If your family's situation involves an installment sale to the next generation or if you earn more than $400,000 a year, immediate action should be taken because implementing a solution may require drafting legal documents and estate and tax lawyers are expected to be busy between now and the end of 2020.
Please contact us about your personal situation, as the tax and other issues involved are substantially dependent on your personal circumstances.
This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.
An individual retirement account (IRA) allows individuals to direct pretax incom, up to specific annual limits, toward retirements that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Tranditional IRA. Contributions to the Tranditional IRA may be tax-deductible depending on the taxpayer's income, tax-filling status and other factors. Taxed must be paid upon withdrawal of any deducted contributions plus earnings and on the earnings from your non-deducted contributions. Prior to age 59%, distributions may be taken for certain reasons without incurring a 10 percent penalty on earnings. None of the information in this document should be considered tax or legal advice. Please consult with your legal or tax advisor for more information concerning your individual situation.
Contributions to a Roth IRA are not tax deductible and these is no mandatory distribution age. All earnings and principal are tax free if rules and regulations are followed. Eligibility for a Roth account depends on income. Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).
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