Our customers’ investments will have less-impressive returns in the future. We can help them achieve better results.
Reducing or eliminating income taxes will maximize the net benefit of their investments.
Income tax planning is beneficial for many reasons. Not as much risk is necessary to achieve income requirements in retirement.
More income is taxed in the lowest brackets because Roth IRAs don’t increase taxable income. Preferentially taxed or tax-free income reduces the chance that Social Security (which is non-taxable at certain income levels) becomes taxable. Finally, if taxable income is kept low, we reduce the possibility that our clients will be subject to Alternative Minimum Tax.
This kind of planning is vital because income taxes will continue to rise. I have discussed this in past columns; the
government will face ever-increasing expenditures. Increased spending will surely lead to increased taxes. They will have to find the money somewhere.