Taxes

Investing to Cut Taxes

After the headline risks of the market and inflation, taxes present the biggest obstacle to your building wealth. Your best investment strategy seeks to not only generate returns on your capital but also to save as much of your money as possible to keep it working for you. One of the surest ways to preserve your capital: Reduce your taxes on investment income and gains.

Here are some strategies.

Readying Estate Documents

Death and taxes: Probably you rarely want to discuss either. This first of two articles looks at how what documents help account for both certainties, though, when planning your estate.

Estate planning involves arranging the transfer of your assets after you die, in line with your goals and wishes. The latter usually include reducing taxes and other expenses, maximizing wealth flow to your survivors and descendants and providing for charity.

Delaying 1st IRA Payouts

For most folks, when you reach 70½, you must start taking money from your retirement accounts every year. A little flexibility exists in the first year for you to plan withdrawals to your tax advantage.

Obama Tax Flight Plan: Doomed

Tax inversions – relocating a U.S. company’s headquarters to a lower-tax nation – are an attractive prospect for American shareholders. But President Barack Obama’s move to block them is doomed because the government has a bad track record in legal tax disputes. Plus, his plan likely would backfire, spurring more foreign takeovers of U.S. companies.

Understanding Your 401(k)

The 401(k), launched almost 30 years ago as a retirement savings alternative for federal civilian employees, now constitutes most working investors’ main nest egg, if not an entire household’s primary asset. Still, investors risk their future with confusion about details of these accounts.

These vehicles are typically “the place to start with savings,” said Ken Weingarten, president of Weingarten Associates in Lawrenceville, N.J., and speaker at an advisory panel.

Curbing Taxes on Inheritances

Inheriting appreciated assets from your deceased spouse can bring a host of financial complications at the time of life when you already have too much on your mind. Here’s the math to know how to be prepared – and maybe save on taxes.

Estate Planning: The Heirs

The murkiest part of estate planning is to discuss when and how to distribute your assets to your heirs. This process requires a series of considerations and trade-offs to avoid emotion-laden family problems.

Up to now in our series of articles we focused on numbers, which are objective and straightforward. But when it comes to this final set of issues, things get gray because emotional factors drive decisions now. There is no correct answer on how to distribute your estate.

Estate Planning: Dividing It

When you die, who gets your money? Your kids, you’d think. But before the money reaches your heirs, the government and creditors take their share first.

Now that you know the estimated amount you have to give, most of the math is over. The rest of the calculations have to do with who gets what proportion of your assets.

Payroll Tax Rules for Family

Family businesses often employ parents, children or grandchildren. If your business does, employees from your family might warrant tax exemptions that can save you big.

“One of the advantages of operating your own business is hiring family members,” claims the Internal Revenue Service. “However, employment tax requirements for family employees may vary from those that apply to other employees.”

Estate Planning: Your Worth

The decisions you make now about where your assets go after your death can affect people’s lives profoundly. This three-part article walks you through some of the basic issues involved with estate planning. This initial part is figuring out how much your estate is worth.

Most people avoid thinking about, let alone planning for, their death. And yet making arrangements can be a liberating experience. Relieving your families of the burden of having to do it for you is also a demonstration of consideration, kindness and love.

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