It’s safe to say that the last 90 days have been trying for many Americans. Don’t despair, there may be some good news about tax reforms. We could be facing the first significant tax reform since 1986!
Let’s shed light on some exciting possibilities:
– Elimination of the ACA Surtax: as you know there is currently a 3.8% tax on income above $200,000 ($250,000 filed jointly) for the Affordable Care Act.
– Reduction of corporate tax rates: Currently as much as 35%! This is an effort to make US companies more competitive thus spurring our domestic economy.
– Repatriation of Corporate Assets: 10% tax holiday on untaxed overseas earnings. This would help pay for the reforms that directly affect the people.
– Amendment of Gift and Estate Taxation: making for easier wealth and property transfer from generation to generation (among other changes).
Many reading this are probably immediately asking: “How do we plan for tax changes when we don’t know what is going to change?” That is a great question. Change is a constant factor, so in financial planning we must accommodate for such inevitability.
The best way to plan for change is summarized below:
1) Asset allocation: Ensure your assets are properly diversified across different asset classes, products and companies (as per your risk tolerance).
2) Follow your plan: When planning properly, short-term changes and uncertainty rarely cause long-term outcomes. Staying the course and knowing why are key factors in long-term success.
3) Be mindful of taxation: There are many different ways to invest. Always ensure your plan diversifies across investments and taxation alike.
As financial planners, we will help you navigate through uncertainty to meet your financial objectives. At Insight Wealth Strategies, we will shed light on the best opportunities for you in an environment of change. If you would like to schedule a time to meet, please contact us at (800) 878-1665. For information visit our website at www.insight2wealth.com.