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One way to elevate your tax efficiency today is by harnessing our record-low tax rate environment – but why is that? It has much to do with The Tax Cuts and Jobs Act (TCJA) of 2017, which expires in 2025 if no action is taken by Congress.READ THE ARTICLE
During this shift, significant changes in the tax code will occur, including:
📌 For estate and gift tax considerations: The current high exemption amounts will be reduced. To mitigate this, strategies such as annual cash gifts, accelerated gifts to 529 educational accounts, establishing dynasty trusts and using irrevocable life insurance trusts (ILITs) can be explored.
📌 Income and capital gains taxes: Wealthy taxpayers may experience an increase in their effective tax rates due to the reversion of tax brackets. Opportunities to accelerate income, such as converting a traditional IRA to a Roth IRA and harvesting capital gains, can be considered to take advantage of lower tax rates before 2026.
If you have yet to put an effective tax plan in place, the clock is ticking! Now is the time to leverage strategies to control future tax liability, while maintaining liquidity throughout your retirement.