Reaping the Benefits With These Simple Tricks The Art of Tax Diversification
Here at Bridgeriver LLC, I’ve dealt with every financial problem imaginable. From investment advising to retirement plans, I’ve been fortunate enough to lead countless clients to the life they want. Over time, however, I’ve found that a lot of people don’t realize just how important tax diversification really is. Having an ample amount of tax diversity can save you a heck of a lot of money in the long run. While you may not be concerned about tax diversity now, you’ll certainly benefit from this information when it comes time for you to plan for your later years. Without it, you could be facing some serious losses through your tax status every year. This is another reason to regularly visit with your preferred tax professional. Together, we can see to it that you’re retaining more of your money while still keeping the pesky IRS off your back.
“This one move can save you a 45% increase in taxes!”
make sure your income reaches to the top of the 12% tier by withdrawing money from your deferred accounts and paying taxes at an incredibly low rate of 12%. In 2019, the maximum tier amount is $39,475 if you’re single and $78,950 for joint filing. After your Social Security and pensions kick in, every dollar of income above $39,475 for single and $78,950 for those married filing jointly will be taxed at 22%. This one move can save you a 45%
increase in taxes! Discrepancies like these are what make retaining a trusted financial advisor so important. Here at Bridgeriver LLC, we want our clients to make the most out of their finances. There is little we can do if you decide to wait until after tax season is over like most people do. If you stop by before the end of the year, you’ll be able to take full advantage of these opportunities. This means finding your taxable amount, filling up your bucket under the 12% tax, and pulling the rest of your money out of a Roth IRA to get to that total amount of income you need. If all goes as planned, the tax man will be taking less money from you, and you’ll be able to sit back and enjoy your spoils the way you intended.
It all boils down to having the right amount of money in taxable accounts and tax-deferred accounts. Whenever you’re working with money, the devil is in the details. The IRS requires you to withdraw money from certain tax-deferred accounts at some point. It’s inevitable and typically happens when you are 70 1/2 years old. You should consider slowly taking your money out of these tax buckets on a systematic basis before you reach that age. While the right amount to take out varies from person to person depending on a number of factors, the best strategy is to then put that money into a tax exempt vehicle like a Roth IRA or life insurance (assuming you meet a few basic requirements). Money in a Roth IRA is tax-free while it’s under that umbrella. Even better, all the money you take out is usually tax-exempt, and there are no required minimum distributions for you as the owner. You can also improve your retirement funds by postponing your Social Security benefits or pension. By postponing your pension or Social Security benefits for a few years, you’ll be able to spend that time in the coveted 12% tax bracket or less. If you do find yourself in these lower tax brackets, you should
To quickly find out your taxable income, stop by the TurboTax website and use their unique financial estimator. By taking into account a number of other factors, you’ll be able to find a close figure to what your taxable income is. For all your financial needs, give Bridgeriver LLC a call at 248.785.3734 or visit our website anytime at www.BridgeriverLLC.com.
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