Tag

Tax Planning Archives | Page 4 of 4 | Wealthspire Advisors

investments taxed

Tax Reform Proposals – Updated

By Blog
Back in April, the White House unveiled its highly anticipated tax plan which, as expected, proposed steep tax cuts across the board. At the end of September, the Trump Administration, in conjunction with the House Ways and Means Committee and the Senate Finance Committee, released a tax reform framework that included many of the same cuts. On November 2nd, the House released a detailed tax reform bill, titled “Tax Cuts and Jobs Act.” Below are comparisons of the initial April proposal, the framework from September and the current House Bill (click on image to enlarge). The more notable parts of…
Read More

Tax Implications of Investing in the U.S. as a Non-Resident Alien

By Blog
In an increasingly globalized society, it is not uncommon for families to have cross-border ties. Additionally, particularly since the 2008 global financial crisis, U.S. equity markets have meaningfully outperformed global equity indices–making the U.S. an attractive place to put capital to work. However, non-resident aliens (NRA) may be surprised to learn of the tax implications of investing in U.S.-based securities. A non-resident alien is someone who, per the IRS, fails both the green card test and the “substantial presence” test over a regular calendar year. NRA status is established at the account custodian with a Form W-8. It does not…
Read More

IRS Announces 2018 Inflation Adjustments

By Blog
Last week, the IRS announced its 2018 annual inflation adjustments. Below are the highlights for items that changed: Standard deductions: For married filing jointly, increases to $13,000 (up from $12,700 in 2017). For single taxpayers and married individuals filing separately, increases to $6,500 (up from $6,350 in 2017) For heads of households, rises to $9,550 (up from $9,350 for 2017). Personal exemption increases by $100 to $4,150. The exemption is subject to a phase-out that begins with adjusted gross incomes of $266,700 ($320,000 for married couples filing jointly). It phases out completely at $389,200 ($442,500 for married couples filing jointly.)…
Read More
kiddie tax

What is the Kiddie Tax?

By Blog
As an advisor who works with clients in their 30s and 40s, I spend much of my time talking about children. Besides discussing how much fun kids are or how little their parents are sleeping, a majority of these conversations focus on the best way to save for children, now and for the future. We often discuss the pros and cons of 529 Savings Plans, custodial (UGMA/UTMA) accounts, and creating and funding separate trusts, as well as target annual savings rates for specific expenses (e.g. college, camp, etc.). One topic that is often overlooked, however, is the tax rules impacting…
Read More
tax law changes

Tax Reform Proposals at a Glance

By Blog
The White House unveiled its highly anticipated tax plan yesterday. As expected, the plan proposes steep tax cuts across the board. Most of the items discussed are in line with Trump’s initial plan, and with the Blueprint proposed by Ways and Means Republicans last summer. Although the final law will look different than these initial proposals, some sort of tax reduction is almost certain given Republican control over Congress. It remains to be seen how steep the cuts will go and for how long they will last. While Treasury Secretary Steve Mnuchin vows that the plan will be financed by…
Read More

Taxation of Employee Benefits When States of Employment and Domicile Differ

By Blog
For many, working in one state and living in another is a common situation.  For example, a 2013 report cited by the New York Times estimates that nearly 400,000 people commute from New Jersey to New York each day.  For those commuters, filing an income tax return in both states each year is the norm.  The typical process is to withhold and pay tax in the state where you work while you also file in your resident state and claim a credit for taxes paid to the non-resident state.  For those who cross state lines to work, there is also…
Read More
tax law changes

Trump and Year-End Income Tax Planning

By Blog
With respect to individual income taxes, President-Elect Donald Trump has proposed to compress and lower tax rates, as well as limit itemized deductions. His proposal would reduce individual tax brackets from seven to three for ordinary income and amend the capital gains brackets accordingly.  For joint filers, this means that (i) income under $75,000 would be subject to a 0% capital gains rate and a 12% ordinary income rate, (ii) income between $75,000 and $225,000 would be subject to a 15% capital gains rate and a 25% ordinary income rate, and (iii) income over $225,000 would be subject to a…
Read More
tax-loss harvesting

A Closer Look at Tax-Loss Harvesting

By Blog
Tax-loss harvesting (TLH) is an important practice that can improve the after-tax returns of investors’ portfolios.  Below, we discuss the benefits, best practices, and limitations of TLH. What is it? Tax-loss harvesting is the process of selling a security at a loss, then using the proceeds from that sale to purchase a similar security.  The realized loss can now be used to offset existing or future realized gains as well as a limited amount of what is considered “ordinary income” for IRS purposes.  The concept behind TLH is to generate a tax deduction without negatively impacting the returns of your…
Read More

Understanding the Proposed Regulations for FLPs and Family Businesses

By and Blog
If you’re a family business owner or you created a family limited partnership (FLP), you may be wondering about the proposed Treasury Regulations that were released earlier this month.  You may have even tried to read an article or two on the topic.  If you’re wondering whether you should care about the proposed regulations and why, please read on. Background Valuation discounts for transfers of business interests between family members can be a powerful gift and estate tax planning tool.  Most discounts relevant to this discussion can be put into two general classifications: (1) lack of control, and (2) lack…
Read More