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Tax Planning Archives | Wealthspire Advisors

planning opportunities

Planning Strategies to Consider in a Volatile Environment

By and Blog
While the Coronavirus pandemic has brought its share of fear and anxiety, it also brings some favorable financial planning opportunities that can be of significant benefit for you and your family. Below are some opportunities to consider. 1. Harvesting Capital Losses: An approximate 20% decline in equity markets from the early year high, along with volatility in sectors of fixed income markets have caused security values to decline.  As we periodically rebalance portfolios, in taxable accounts we look to realize capital losses and replace sold positions with similar, but not identical, securities to maintain desired exposures. When we “harvest” capital…
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tax law changes

Estate Planning in Light of Tax Reform: Your Questions and Our Answers – 2020 Update

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This post will help you unpack some of the estate and gift tax provisions of the 2017 Tax Reform Act, as well as answer some of the most pressing questions raised by the changes. In a nutshell, what stayed the same and what changed? One major item that stayed the same is the simple existence of an estate tax. The initial tax reform bill from the House called for a complete elimination of the estate tax, which didn’t make its way into the final law. Trump had also talked about altering the current date-of-death basis step-up for gains above a…
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cliff

Mitigate New York’s Estate Tax Cliff with Smart Estate Planning and Gifting Strategies – 2020 Update

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While the large increase in the federal estate tax exemption has provided many with federal estate tax relief, New Yorkers must continue to plan for New York estate tax. For a quick review of the New York Estate Tax “Cliff” basics, see the “Understanding New York’s Estate Tax “Cliff” blog post. What is the current exemption from New York estate tax again? The current New York estate tax exemption amount is $5,850,000 for 2020. Under current law, this number will remain until January 1, 2021, at which point it will rise again with inflation. Who does the Cliff affect? Everyone…
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gst tax

Basics of Federal Estate, Gift and Generation-Skipping Transfer (“GST”) Tax – 2020 Update

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The bad news is that there is a Federal tax on assets that you give away during life, at death, and to individuals two or more generations below you. The good news is that this tax will only apply to the wealthiest Americans and, even so, there are strategies you can use to minimize or avoid its application. The Federal estate, gift and GST tax only kicks in above a certain dollar threshold. Furthermore, there are additional wealth transfer strategies that do not trigger any tax at all if structured properly. Taxable Gifts There is a Federal estate and gift…
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tax cheat sheet

2020 Federal & State Estate and Gift Tax Cheat Sheet

By and Guides & Whitepapers
Here we have provided a “cheat sheet” to keep in mind for 2020 federal estate, gift and GST exemptions, as well as exemptions and inheritance tax consequences in specific states where a number of our clients reside. Federal Estate, Gift, and GST Tax Below is a summary of the current federal estate, gift, and generation-skipping transfer tax provisions for 2020. Note that, under current law, the increases in exemption amounts that began in 2018 are set to expire in 2026, at which point they will revert back to the pre-2018 numbers (i.e., $5,490,000 per person, indexed for inflation). Gift and…
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SECURE Act

The SECURE Act: What You Need to Know

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On December 16, 2019, Congress agreed to a spending bill which included a law called the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). The SECURE Act was passed only by the House in the summer, but seemed to be falling by the wayside until it was attached to this spending bill. The new law is effective January 1, 2020. Below is some insight into the major implications of this new law, and some thoughts on how to lessen the impact of the most important change: the removal of the stretch RMD provisions on inherited IRAs. What did…
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gifting 2019

Do I need to make gifts before the end of the year?

By Blog
With all of the political uncertainty and recent changes in the tax law, our clients are wondering what to do about gifting. Below are answers to three commonly asked questions that we are getting this time of year. Note that this blog covers non-charitable gifts.* 1. Do I need to make gifts before the end of the year? Only if you are making annual exclusion gifts. You may give away $15,000 per person ($30,000 if gift-splitting with a spouse) each year tax-free. If you want to use your annual exclusion for 2019, the gift needs to be completed before the…
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new york estate tax cliff

Understanding New York’s Estate Tax “Cliff” – Updated October 2019

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It has been more than six years since some dramatic changes were made to New York’s gift and estate tax law. For many clients, the subject of the New York estate tax “cliff” continues to remain a source of confusion. This is for good reason. The New York cliff is not easy to understand, nor is it easy to know how it may impact your particular situation. The answers below are intended to guide those who remain baffled by the New York estate tax cliff. For a quick snapshot of the 2019 estate and gift tax rates for New York…
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roth ira

What is a Mega Backdoor Roth IRA?

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Most people have heard of Roth IRAs. Those that qualify typically contribute and those that do not qualify can sometimes find a way to do so, as Zach Gering indicates here. In either case, you can do MORE. Take a step back and understand plan types and limits Depending on your current occupational status and business structure, you may or may not be able to open any of the accounts noted above. For starters, any individual can open an IRA (with certain age/income requirements). All of the other plans must be company sponsored. An optimal retirement plan design permits annual…
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backdoor roth contribution

The Benefits of a Backdoor Roth Contribution

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It is that time of the year – with tax season comes retirement account contribution season! The most popular retirement account of the current 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, Roth’s are funded with after-tax dollars. There is no tax deduction for contributing. Evaluating whether to contribute to a pre-tax or Roth IRA is a common exercise. A prevalent misconception is choosing a pre-tax account is the best option. This is mostly because the investor expects that his tax rate will decline in retirement.…
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