{"id":12618,"date":"2022-02-21T09:49:30","date_gmt":"2022-02-21T15:49:30","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=12618"},"modified":"2022-02-21T09:49:47","modified_gmt":"2022-02-21T15:49:47","slug":"iowa-fiduciary-services-part-5-tax-options","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/iowa-fiduciary-services-part-5-tax-options","title":{"rendered":"Iowa Fiduciary Services Part 5: Tax Options"},"content":{"rendered":"

Taxes: One word that strikes fear into the hearts of many. Yet this financial burden won\u2019t be going anywhere soon.\u00a0 Proper tax planning makes it easier to build your personal finances and afford the things you want. Additionally, by anticipating taxes when you create your financial plan, it’s possible to significantly boost how much money you will have in retirement.<\/strong><\/p>\n

Looking for Fiduciary services in Iowa? The fifth part of services<\/a> we offer at Johnson Wealth and Income Management is assisting with your tax options as you reach retirement. Understanding tax strategies and managing your tax bill should be part of any sound financial approach. Some taxes can be deferred, and others can be managed through tax-efficient investing (more on this below). With careful and consistent preparation, you may be able to help manage the impact of taxes on your financial efforts.<\/p>\n

Here\u2019s a look at how Johnson Wealth and Income Management can help.<\/p>\n

Managing Your Taxes<\/strong><\/h4>\n

Chances are, you\u2019ve heard of a tax strategy, but you don\u2019t know where to start. Just thinking about taxes might even make you nervous and overwhelmed. Tax strategies have one overriding objective: to increase your wealth. Whether you\u2019ve already filed your taxes this year or are in the middle of tax preparation, here are some tax strategies you should consider discussing with your Iowa Fiduciary:<\/p>\n

Tax Investments: <\/b>The decisions you make about when to buy and sell investments, and about the specific investments you choose, can help to impact your tax burden. While tax considerations shouldn’t drive your investment strategy, consider incorporating these concepts into your ongoing portfolio management process.\u00a0<\/span><\/p>\n

Tax losses:<\/b> Tax-loss harvesting is a strategy that can help investors minimize any taxes they may owe on capital gains or their regular income. It can also improve overall investment returns. A loss on the sale of a security can be used to offset any realized investment gains. If there are excess losses, up to $3,000 can be claimed against taxable income in the current year, and the rest of the loss can be carried forward to offset future realized gains or income.<\/span><\/p>\n

Tax-exempt securities:<\/b> Tax treatment for different types of investments varies. For example, municipal bonds are typically exempt from federal taxes, and in some cases receive preferential state tax treatment. On the other end of the spectrum, real estate investment trusts and bond interest are taxed as ordinary income. Sometimes, municipal bonds can improve after-tax returns relative to traditional bonds. Investors may also want to consider the role of qualified dividends as they weigh their investment options. Qualified dividends are subject to the same tax rates as long-term capital gains, which are lower than rates for ordinary income.<\/span><\/p>\n

Fund distributions: <\/b>Mutual funds distribute earnings from interest, dividends, and capital gains every year. Shareholders are likely to incur a tax liability if they own the fund on the date of record for the distribution in a taxable account, regardless of how long they have held the fund. Therefore, mutual fund investors considering buying or selling a fund may want to consider the date of the distribution.<\/span><\/p>\n

Taking a Fresh Look at Tax Efficiency with a Fiduciary<\/b><\/h4>\n

A Fiduciary duty exists in law when a person or entity places trust, confidence, and reliance on another to exercise discretion or knowledge in acting on behalf of the client. The Fiduciary must knowingly accept that trust and confidence. From income tax planning and consulting to estate and retirement planning, we are here to support you and your family\u2019s financial needs.<\/p>\n

Iowa Fiduciary Matthew Johnson from Johnson Wealth and Income Management recommends the following two tax-efficient strategies to include in your ongoing retirement plan:\u00a0<\/span><\/p>\n

Contribute to tax-efficient accounts<\/b><\/p>\n

Take advantage of tax-efficient retirement accounts to help reduce current and\/or future taxes.\u00a0<\/span><\/p>\n