2015 Tax Outlook: More Gridlock & Partisanship
2015 Tax Outlook: More Gridlock & Partisanship
( tax reduction strategies will be even more critical to reduce your income taxes)
You may remember that 2013 was a big year for taxes. Congress passed legislation averting the so-called “fiscal cliff,” and many of the “Obamacare” changes took effect. While few of us who watched the process would consider it Washington’s finest hour, we at least had answers to many of the questions that had made proactive planning more difficult over the past few years.
What a difference a year makes! 2014 started off with partisan bickering, and ended with even more gridlock. It took Congress until December 16 to pass “tax extender” legislation, reinstating tax breaks that expired all the way back on January 1. (Those same provisions expire on January 1, 2015 — meaning Congress will have to do it all over again next year!) About the only thing they could actually agree on was cutting the IRS budget back to pre-2009 levels, which will only make the taxation bureaucracy even harder to navigate. Let’s not mention the complexity of the “Affordable Care Act”, and the “Individual Mandate” coming to a neighborhood near you!
President Obama and Congressional leaders have said that corporate tax reform is “on the table” for the final two years of the current administration. However, amid the continuing partisan wrangling over the budget, and the approaching 2016 election, there appears to be little appetite on Capitol Hill for significant changes to the personal tax rules. So up to date personal tax advice is critical
Ordinarily, we would take this occasion to walk you through the upcoming year’s most promising new opportunities to manage your tax bill. This year, thanks to gridlock and Washington’s propensity to make a crisis out of everything, there just isn’t enough “new” to discuss. But we’ll be sure to keep you informed of any legislative changes that do make it out of Washington, as well as new regulations or court decisions that could create tax savings.
At the same time, we ask that you sign up for our Two Minute Tax Reduction Strategies Video Newsletter to keep you informed of changes that might affect your taxes. As a bonus you will receive two free reports. Ten Tax Reduction Mistakes Business Owners Make and Ten Tax Reduction Mistakes Individuals make.
We’re working hard to help you pay less, even if Washington isn’t! So if you have questions, don’t be afraid to give us a call. Stay tuned for our income tax preparation special offer coming soon. Call me today at 610-945-1954 for your free Tax Reduction Strategies Analysis. We’ll find the mistakes and missed opportunities that may be costing you thousands today, and show you how “New Years” tax planning can save thousands more tomorrow.
David M. Warrick, CFP EA
“admitted to practice before the IRS”
This Year, Put the IRS (and tax reduction strategies) in Your New Year’s Resolutions!
This Year, Put the IRS (and tax reduction strategies) in Your New Year’s Resolutions!
January 1 is almost here, and for millions of Americans, that means resolving to lose weight, quit smoking, drink less, volunteer more, or travel to new and exciting destinations. Seeking public support, we post our resolutions on Facebook and other social media, and even make bets with our friends over who will succeed more magnificently.
The sad reality is that most New Years’ resolutions fall woefully short. By Groundhog Day, we’re back in our bad old habits. Those gyms and fitness clubs that were full in January? By February, they’re empty. Those pantries that are full of healthy vegetables now? By Valentine’s Day they’ll be packed full with “foods” ending in “-itos”!
So, this year, why not make a resolution you’ll want to keep? Why not resolve to stop wasting money on taxes you don’t have to pay! Personal tax advice could be just what you need.
The good news is, you can do this without starving yourself, spending hours on a treadmill, or giving up your favorite vice. You just need a plan. Tax planning is the key to paying the legal minimum, especially with today’s higher rates. And a good tax plan will improve your financial fitness for next year and all the years to come.
Call me today at 610-945-1954 for your free Tax Analysis. We’ll find the mistakes and missed opportunities that may be costing you thousands today, and show you how “New Years” tax planning can save thousands more tomorrow. We guarantee you’ll appreciate the fresh start with your taxes charity. So call now to schedule your Analysis!
Sincerely,
David M. Warrick, CFP EA
Enrolled Agent
“admitted to practice before the IRS”
How To The Reduce or Eliminate The Tax Consequences of a Required Minimum Distribution or RMD?
How To The Reduce or Eliminate The Tax Consequences of a Required Minimum Distribution or RMD?
Barbara Davis, needed personal tax advice. She is 75, and has an annual income from social security, a pension and some IRA investments totaling $60,000 annually. She and her late husband also managed to save several hundred thousand dollars in non‐qualified CD’s, currently earning low rates. Her RMD’s are increasing each year, and she would like to pay less in taxes, and support several local charities.
The Tax Reduction Network suggested the following strategy as a way to support her favorite charitable work, have a future income, and create a way to re-characterize their qualified money without substantial tax consequences.
The Tax Reduction Network suggest the following strategy as a way to support their favorite charitable work, have a future income, and reduce the tax consequences of a Roth conversion.
Here’s how it worked:
1. Barbara transferred $100,000 from a variety of poorly performing non‐qualified assets to fund a TRN Strategy.
2. Mary received a $48,961 immediate income tax deduction which she can use against 50% of her AGI this year, with a potential 5 year carry‐forward.
3. The new TRN Strategy can provide for a structured inheritance for her children, OR she can turn on an additional income herself in future years.
4. Mary recommended her favorite charities to benefit immediately from her completed Legacy Strategy.
Results:
Current Market Value of Assets funding TRN Strategy $100,000
Immediate Charitable Income Tax Deduction $ 48,961
Tax Savings at Estimated 25% Tax Bracket $ 12,240
Annual Income Payments Beginning in 10 years $ 8,216
Total Payouts Over 15 Year Term Certain Payout $123,242
This is one just one way of reducing taxable income
Call now at 610-945-1954 to set an appointment.
How Can You Convert an IRA to a Roth IRA and Eliminate or Reduce The Tax Consequences?
How Can You Convert an IRA to a Roth IRA and Eliminate or Reduce The Tax Consequences?
Mike & Mary Biden, ages 75 and 73, needed personal tax advice. They currently have over $400,000 in various bank accounts earning less than 1.5%. They also have a number of IRA’s totaling $300,000. They would like to reduce or eliminate their RMD’s, as they currently have enough income from social security and their pensions to enable them to live comfortably. Their long‐term care needs have been addressed. Their unwanted RMD’s are pushing them into a higher tax bracket, and they are also concerned that their heirs would pay substantial taxes should they inherit the IRA’s.
The Tax Reduction Network suggested the following strategy as a way to support their favorite charitable work, have a future income, and create a way to re-characterize their qualified money without substantial tax consequences..
Here’s how it worked:
1. Mike & Mary funded a TRN Strategy, $200,000 of non‐qualified assets that were earning very low rates.
2. The TRN Strategy issued a Deferred Income program that will payout to them, or to their heirs beginning in 10 years (they may turn on income sooner if they need to) for 20 years.
3. Mike & Mary received an immediate income tax deduction of $94,137.
4. The Biden’s recommended that their church and their local homeless shelter receive immediate charitable grants as a result of their completed TRN Strategy.
5. The Roth conversion was elected on some of their IRA’s, utilizing the tax deduction to
off-set what would otherwise have been a taxable event.
Results:
Total Value of Assets transferred $200,000
Tax Deduction Created $ 94,137
Tax Savings @ 25% $ 23,534
Annual Income (10 yr. deferral /20 yr. payout) $ 14,283
Potential Benefit (payout plus tax savings) $ 309,194
Amount of Charitable Recommendation $ 6,000
This is one just one way of reducing taxable income.
Call now at 610-945-1954 to set an appointment.