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Taxes
Learning Center • financial tips • cash reserves • insurance • savings accounts • growth investments • taxes • retirement • estate planning  |
With your large amount of assets, you need to work closely with your tax adviser to reduce your tax burden as much as possible.
Qualified retirement plans have two big tax benefits so use them as much as you can. First, the money you contribute each year is tax deductible, and second, the income and capital gains earned in all qualified retirement plans are also tax deferred so keep your fastest growing investments – stocks, stock funds and real estate trusts -- in your qualified plans: IRA, 401-K, 403-B, 457, etc.
Estate taxes can be huge, so discuss your estate plans with your tax planner and estate attorney, or the IRS may be your biggest beneficiary.
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When you are able to invest more money each year than you are allowed to contribute to your qualified retirement plan, then look at fixed and variable annuities because their earnings are tax deferred until they are withdrawn (used). Also look at municipal bonds and municipal bond funds because their interest earned is tax free both federally and in the state in which they are issued. However, they may be subject to the Alternative Minimum Tax, AMT, if you have a very high income. Roth IRAs have tax-free earnings and they are also not taxed when cashed in.
Peterson Money Books
Book: The Challenge of WEALTH, by Erlend Peterson, CFP
Managing the Joys, Responsibilities, and Opportunities
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