Money Matters: What to know about the Biden administration’s new tax proposals
COLUMBIA, S.C. (WIS) - Recently, we’ve heard a lot from the Biden administration on new tax proposals involving capital gains and business taxes. Josh Bradley of Capital City Financial Partners breaks down these proposals and who’s most affected.
“The first thing to keep in mind is this was only for those of us making over $1,000,000 a year and the proposal said that if you’re making under $400,000 a year your taxes would not be affected at all,” said Bradley.
Bradley went on to say most people keep their stocks in taxed-advantaged accounts like 401Ks, IRAs, and Roth IRAs and these capital gains rates would not affect those accounts. Lastly, Bradley pointed out President Biden opened the conversation ready to negotiate knowing he probably will not get what he has initially laid out.
Is there a way to limit or avoid these types of taxes? Bradley says yes.
Go to more tax-efficient investments
- Managed account or mutual fund accounts are extremely tax efficient
- Switching to lower-cost index funds could save you tons in capital gains taxes every year
Utilize tax-advantaged accounts
- Roth, 410Ks, and IRAs are very attractive
- Life insurance and annuities might be even better option
- If you give to church or charities and you’re not using highly appreciated stocks, you should
Anticipating a big sale of a property or business?
- Restructure sale over multiple years to stay under the $1,000,000 number
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