If you thought your taxes were high in 2012, just wait. Your tax rate is going up plus you’re going to start losing deductions and exemptions.
You may have heard the hype about taxes only going up less than 5% and that is only going to hit people who make over $400,000.
It’s simply not true! If your income is over $250K ($300K as a married filing jointly couple), itemized deductions and exemptions will start to phase out. The marriage penalty is back. Plus, we have the Obamacare medicare surtaxes on W-2 income and passive income.
Plus when you consider that the upper tax rate has gone from 35% to 39.6%, the increase isn’t less than 5%. The increase from the rate is actually 13% (4.6% / 35%). Add in the other changes and many people are seeing increases of 40% or more in the taxes they pay.
It’s never been more important to look at the 3 most important parts of tax planning:
- Are you in the right business structure? Avoid self-employment tax of 15.3% by incorporating.
- Are you taking all of your deductions? There is an art to finding your legal hidden business deductions. Is the expense ordinary and necessary to the production of income? If the answer is yes, you’ve probably got a deduction.
- Is it time for an aggressive pension plan? A pension plan gives you a deduction, but it also gives you the opportunity to build assets and cash flow with no taxes. A pension plan is often the throw-away last minute tax strategy, but it doesn’t need to be. Pension plan investing gives you the ultimate in asset protection plus lets you build without taxes.
The one thing that is certain no matter what tax saving strategies you employ: Get them in place now! You can’t save money on your 2013 taxes in 2014.
We have experience working with clients who want to build businesses, improve cash flow, protect assets and build real estate. Give Richard a call at 888-592-4769!