Updated: Mar 22
What strategy should people have when planning their taxes under the Biden administration?
There has never been a more important time in possible generations when individuals and businesses need to have a tax mitigation strategy. The Biden administration has tried unsuccessfully three times over the last year to implement changes to the internal revenue code that would increase taxes on nearly every upper middle income and high earning American. These landmark changes are more significant than any proposals I have experienced in a 30-year career as a practicing CPA.
Even today, taxes represent the largest outflow of cash for individuals. Taxes come off the top and unfortunately, clients have to rely upon CPAs to control this cost. Many CPAs, however, are compliance and historically oriented providing little advice or guidance to reduce. A tax recovery strategy typically creates a lifetime annuity of savings and when invested, allows us to compound earnings on dollars that would ordinarily be paid in taxes. This planning creates hundreds of thousands, if not millions of dollars of accumulated wealth at retirement.
Here are the key tax planning principles:
Volunteer to pay tax on the cash flow you need to live off of and work diligently to either defer or eliminate tax on the excess income.
Keep investment income and gains of your 1040 during years where you have high active income from your job, profession, or business
Create tax-free wealth so that later in life your excess cash flow can be kept in ultra-low-rate brackets.
Key City Capital is a team of Wealth Architects solely focused on improving investment performance and recovering dollars unnecessarily paid in the form of income taxes. All clients have the opportunity to schedule a complimentary consultation to see how you can benefit from this planning.
Key City Capital sponsors tax-advantaged investments that have embedded strategies allowing clients significant control over the income and gains they realize. K-1's and tax reporting documents for 2021 will be sent out to clients by April 1.
The Biden administration has tried unsuccessfully three times over the last year to implement changes to the internal revenue code that would increase taxes on nearly every upper middle income and high earning American.