Tax PlanningTax planning is the key to limiting the damage the IRS can do to your hard earned gains. With tax rates set to rise, anyone not pursing tax planning is asking for a financial beating. Let me ask you a simple question. If you knew the exact date when your assets would take their heaviest hit, when would you do something to protect your wealth? Well, that day is here. Let’s do the simple math. The national debt as I write this is $13.2 trillion dollars. That doesn’t include the “off the books” liabilities like Medicare, Social Security and the prescription medication plan that are expected to add upwards of seventy trillion dollars to the national debt in the next 30 years. Politicians have long been loath to deal with this problem. Soon, they will not have a choice. It is estimated that the debt will be the equivalent of 96 percent of gross domestic product by 2020. Any country that has seen such debt levels has been hit with a devaluation of their currency. In short, it is a major problem and one that is going to require very painful financial decisions. The government will be forced to do two things. The first is cut expenses. We all know how the politicians of both parties hate to do this despite what they say in public. The second choice is to raise taxes. I don’t have to tell you which route the politicians are more likely to go. This doesn't even take into account the likelihood of rising interest rates at the same time. We can already see the problem starting to pay out. Let’s consider New York for a minute. The state is in the red in a big way. To raise money, it goes after sin products. One is tobacco. I don’t smoke and I don’t advocate it in the least. Nonetheless, the fact a pack of cigarettes now costs over $11 in New York is shocking, particularly since most of the price is tax. Sooner or later, the powers that be are going to be raising income, estate planning (death), capital gains and property taxes. The increases are going to be painful. Tax planning is the key to limiting the pain. People complain about paying taxes, but many pay more than they should because they simply don’t investigate the basic options they have that can slash their tax bill every year. If you are tired of paying thousands upon thousands of dollars more than you need to in state and federal taxes, contact us today at (800) 341-5433 or via this contact form to learn more about tax planning and how to slash your tax bill.
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