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Tax Planning Archives - Page 2 of 4 - Wealthspire | Page: 2

roth ira

What is a Mega Backdoor Roth IRA?

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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

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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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2021 tax law proposals

The Shape of Things to Come: 2021 Tax Law Proposals

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Although I am writing this in early April, I promise you, this is no April Fools’ Day joke. There are many potential tax law changes on the horizon, but today I will address two of the most recent proposals. On March 25, 2021, Senators Bernie Sanders (D-VT) and Sheldon Whitehouse (D-RI) introduced what they call the “For the 99.5% Act.” The title refers to the authors’ attempt to make the estate tax system more progressive so that it will result in a stronger economy for 99.5% of Americans, only impacting the top 0.5%. Under current law, the estate and gift…
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trust tax

How Are Trusts Taxed? FAQs

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With the tax season fast approaching, you may have questions about how your trust is taxed, who is responsible for tax filings, or how trust income taxes get paid. This blog will answer some common questions you may have about the taxation of your trust. Do all trusts pay income taxes? It depends. A trust is a separate legal and taxable entity. Whether the trust pays its own taxes depends on whether the trust is a simple trust, a complex trust, or a grantor trust. Simple trusts and complex trusts pay their own income taxes. Grantor trusts do NOT pay…
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tax savings qsbs

The Powerful Tax Savings of “Qualified Small Business Stock”

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IRC Section 1202 provides one of the most powerful tax benefits in the U.S. Internal Revenue Code (IRC) to entrepreneurs and investors. However, it is also one of the least recognized IRC Sections, even amongst those who stand to most benefit from its use. Section 1202 provides an exclusion from taxation to a qualified investor of up to $10 million of capital gain or 10 times the stockholder’s adjusted cost basis, whichever is greater, upon the sale of Qualified Small Business Stock (QSBS). Why has such a generous provision in the tax code gone comparatively unnoticed? A look back at…
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