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Getting hit with AMT. Alternative minimum tax was passed in 1969 to make sure the wealthiest earners didn’t avoid paying taxes. Because it was not designed to keep pace with inflation, this additional taxation is reaching more and more ‘middleupper income’ households. Under new rules passed January 2nd, 2013 you may be able to reduce your tax liability.

Allowing your investments to be taxed at short term capital gains rates. If you aren’t aware of how trading takes place in your portfolio, you may be paying higher tax rates if you have a lot of trading where you haven’t held the investment for more than 12 months. Short term gains rates are taxed differently than long term rates.

Using ‘safe’ savings strategies. In this low interest-rate environment, many investors are in the search for yield. Saving money though, in traditionally ‘safe’ vehicles, (Bank saving accounts, CD’s, etc.) can leave you with a negative real return figuring in inflation and taxation. There may in fact, be available to you vehicles that can outpace inflation.

Under-utilizing tax deferred vehicles. Using tax deferred accounts can keep you from having to pay taxes each year on interest and dividends and defer that taxation until a later date when you may be in a lower tax bracket, i.e. retirement. When taxation isn’t reducing your account balance you may be able to allow more of your money to work harder for you.

Believing you cannot employ IRA contributions. Even if you don’t qualify to deduct your IRA contributions, you may still be able to contribute which will defer current taxes. These are called non-deductible IRA’s and income limits are higher for contributions to ROTH IRA’s. You may also be able to contribute for a non-working spouse in

addition to your contributions. ROTH IRA’s may allow tax free income at retirement and are considered tax-deferred vehicles.

Do you need help with financial planning or retirement planning? Contact me, Brandon, at 866-360-2724 or email me at Barchibald@theivyag.com for an appointment with someone who will take care of you through your retirement.

The first step toward achieving your retirement goals is having a plan…