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Tax Planning Archives - Wealthspire

Capital Gains

Financial Dictionary
What are Capital Gains? Capital gains are the difference between a security’s purchase price and its selling price, when the difference is positive and sold at a profit. When it comes to mutual funds, capital gains may also be realized without selling the security as a distribution of gains the fund has made and pays out to shareholders. Capital Gains Calculator To determine capital gains, subtract your basis (what you paid), from the amount realized (how much you sold it for). The difference is your capital gain if it is a positive number, or capital loss if it is negative.…
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tax law changes

Tax Proposals: Big Changes to Come

By and Blog
On September 13, the House of Representatives Ways and Means Committee released a set of proposals as part of a $3.5 trillion spending and tax bill that Democrats hope to pass in the fall. If passed, the legislation would advance many of President Biden’s economic and social policies. Many of the details will likely change as the bill makes its way through a series of deliberations and votes. But the initial draft provides a good deal of insight about what we can expect. Below is a summary of the proposed changes and some key take-aways for clients: Income and Investments Increases the top individual tax bracket to…
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backdoor roth contribution

The Benefits of a Backdoor Roth Contribution

By Blog
The most popular retirement account of the past decade is the Roth IRA. It offers tax-free growth, tax-free withdrawals after age 59.5, and no minimum distribution requirements. Unlike traditional IRAs, Roths are funded with after-tax dollars, which means there is no deduction for a contribution. Evaluating whether to contribute to a pre-tax or Roth IRA is a common exercise. Many are drawn to the upfront benefit because of the tax savings and/or they expect their rate will decline in retirement. However, if your time horizon is decades, Roth savers are much more likely to end up with more after-tax money.…
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roth ira

What is a Mega Backdoor Roth IRA?

By Blog
Most people have heard of Roth IRAs. Those who qualify typically contribute and those who do not qualify can sometimes find a way to do so, as we explain here. In either case, you can do MORE. Take a Step Back and Understand Plan Types and Limits 2021 Retirement Plan Limits Account Type 2021 Limits IRA $6,000 50+ Catch-Up Limit $1,000 Simple IRA $13,500 50+ Catch-Up Limit $3,000 SEP IRA $58,000 401(k) $19,500 50+ Catch-Up Limit $6,500 Profit Sharing Plan $58,000 Defined Benefit Plan (Annual Limit) $230,000 Depending on your current occupational status and business structure, you may or may…
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child tax credit

The Child Tax Credit: 2021 Updates

By Blog
The Child Tax Credit has existed in many forms over the last 20 years, but the changes implemented by the American Rescue Plan Act of 2021 have expanded the program significantly. It is estimated that more than 93% of children, ~69 million, will receive benefits under the new plan. The new credit will not impact all families equally and currently only applies to the 2021 tax year. In 2020, each child under the age of 17 claimed as a dependent on a parent’s return could qualify for a credit of up to $2,000. This credit was implemented under the Tax…
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