Tax Efficient Financial Strategies Company Name Here

Tax Efficient Financial Strategies

Company Name Here

Managing Director

MACROBUTTON AcceptAllChangesShown [name]

Tax Efficient Financial Planning

Astute financial planning in the current economic climate is critical. While we cannot control the ebbs and flows of either the market or the decisions of the government that affect one's personal finances, we can attempt to grow and preserve wealth through tax efficient financial planning. There are solid vehicles available, if utilized correctly, can successfully minimize income, capital gains and estate taxes for our clients. Below provides detailed information on vehicles available to provide minimal tax exposure.

Income Tax Minimization

Deferred Variable Annuities

Using this method clients not only are able to minimize their incomes taxes, but they this vehicle also provides asset protection.

401K or other Qualified Retirement Plan

Contributions to a 401k or a similar retirement plan are tax-deferred and not-taxable until withdrawal. Contributions help to lower an individual's AGI thereby lowering their income taxes or even lowering their tax bracket all together.

Tax Credits

Tax credits are available for a multitude of things including, adopting a child, becoming a first time homebuyer and taking college classes. In addition, for those with children there is the child tax credit and homeowners may be eligible to take advantage of energy tax credits. Tax credits effectively reduce taxes owed on income.

Limited Liability Company

Set up a Limited Liability Company (LLC) to create income outside of W2 income. Within the LLC exist opportunities for tax write-offs such as entertainment, utilities and travel.

Capital Gains Tax (CGT) Minimization

Invest in IRA's and 401K's

Buying and selling within these two types of accounts do not trigger the capital gains tax as investments if bought and sold outside of an IRA, 401K or other qualified pension plan would. Owning investments outside of these structures that trade often will trigger the Capital Gains Tax, moving these investments into an IRA or 401K would help to alleviate the CGT burden.

Index Funds

Index funds trade less than managed mutual funds, meaning that index funds have a lower rate of capital gains taxes. Using Index Funds in lieu of traditional managed mutual funds will effectively lower capital gain taxes paid.

Stock Transfer

Gains in regular stock will trigger the Capital Gains Tax. Instead of taking the gains, transfer the stock to another (in a lower tax bracket). This person can sell the stock and pay fewer taxes allowing the individual transferee to avoid the CGT.

Minimize estate tax

Gifting

An individual can gift up to $1,000,000 during his or her lifetime without incurring taxes on the gift. Once can give up to $13,000 per year per person, with no tax consequences to the giver. Gifting reduces the taxable valuable of one's estate. In addition, gifts can be made directly to cover a person's medical expenses or high-education tuition with no spending limit or tax consequence.

Trust

Setting up a trust can help to avoid estate taxes, if not eliminate them. One common trust is an Irrevocable Life Insurance Trust (ILIT). A policy placed in this type of trust has no owner, providing a huge tax advantage and benefits for the beneficiaries.