With April 17th right around the corner, many people have taxes on their mind. What people don’t realize is that we are in one of the lowest tax rate environments that has ever existed. The top tax rate for an individual is currently at 35%. The capital gains rate is at 15%. To give you a historical perspective, the top tax rate has been upwards of 90%! The United States has a deficit of over $15 trillion dollars and the deficit for 2012 is projected to be $1.3 trillion dollars. Unless Congress changes the law, the top tax rate will increase to 39.6% in 2013. Capital gains taxes will also increase to 20%. There will also be a surtax of 3.8% on investment income for taxpayers earning over $250,000. So my question for everyone… what have you done to protect yourself against rising taxes? I find most people are more reactive and have no real plan to minimize taxes over their lives. Let me give you an example: Let’s say that you contributed $5,000 per year to an IRA from ages 25 to 60. Let’s also assume the IRA earns 7%. You contributed a total of $175,000. Assuming you are in a 25% tax bracket, over the years you received a tax savings of $43,750. The IRA has grown to $1,455,000 by the time you reach 70. If you remain in the same 25% tax bracket, you will need to pay the IRS $364,000 in income taxes upon withdrawal. If your taxes increase to 40% you will owe $582,000. So is it a good deal to save $43,750 in income taxes during your working years only to have to pay between $364,000 and $582,000 during your retirement years? We believe there is a better way to handle this. On April 24th we will be holding a focus group entitled The Tax Drain, which will cover many of the strategies we use to protect our clients against rising taxes. If you are interested in attending or would like to schedule a consultation, please e-mail or contact our office.


STANDARD COMPLIANCE DISCLOSURE: Bruce Horowitz is a Registered Representative with/and offers Securities and Advisory Services through Commonwealth Financial Network , Member FINRA/SIPC , a Registered Investment Adviser. CA Insurance License # 0B66129. Innovative Wealth Strategists is located at 6767 Forest Lawn Drive Suite 120, Los Angeles, CA 90068 This communication is strictly intended for individuals residing in the states of CA,CO,CT,FL,HI,NV,TN. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services. Please review our Terms of Use here:

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