Tax

Taxes can be a silent drain on your investment returns over time, potentially reducing your portfolio performance by up to 2% per year, according to a study by Morningstar, which looked at pre- and after-tax investment returns from 1926 to 2023. Even if you haven’t sold a mutual fund or haven’t seen gains in your portfolio, you might still be on the hook for capital gains taxes—a tax obligation that can be largely out of your control. This effect is often referred to as the “mutual fund tax trap,” and…

If you’ve seen a wage increase this year, congratulations! However, there might be a downside to that extra cash. Your new paycheck could push you into a higher tax bracket—a situation known as tax-bracket creep. Tax-bracket creep occurs when wages rise due to inflation, pushing individuals into higher marginal tax brackets, potentially increasing their tax bills. This phenomenon can be especially frustrating as rising costs already squeeze budgets. While the federal government adjusts tax brackets annually for inflation, various credits, deductions, and surcharges don’t always receive the same treatment. This…

As we approach the 2024 presidential elections, there is a growing sense of uncertainty about the future of various financial policies, especially those related to taxes. At the center of these discussions is the Tax Cuts and Jobs Act (TCJA) of 2017, a significant piece of legislation that brought about extensive changes to the U.S. tax code. With the TCJA set to sunset at the end of 2025, the upcoming election could have profound implications for your finances. The Political Landscape and Potential Changes President Biden has indicated a preference…

As summer unfolds, it’s an opportune time to get ahead on your 2024 tax strategy. While you might still be savoring the relief of having filed your 2023 taxes, proactive planning can help you reduce your tax burden for the next year. Here are six tax-planning strategies to consider implementing now to ease the process come next April. 1. Examine Your W-4 Withholdings Most people fill out their W-4 form when they start a new job and forget about it. However, it’s crucial to revisit this document periodically, especially if…

When contemplating a move, whether for career opportunities, lifestyle preferences, or financial considerations, taxes might not be the first thing that comes to mind. However, the impact of state taxes on your overall financial health can be significant. From the sunny beaches of Florida to the rolling hills of North Dakota, each state’s tax policies play a crucial role in shaping residents’ financial landscapes. According to data from the US Census Bureau, population trends indicate a clear preference for low-tax states, particularly in the Sunbelt region. Conversely, higher-tax states in…

2024 is here, and with it comes a renewed focus on financial planning and, of course, taxes. While the future remains uncertain, one thing is clear: you can take control of your tax situation with proactive planning. Here are seven key tax-smart moves you can make right now to potentially reduce your tax burden and keep more of your hard-earned money: 1. Seize Available Deductions: Embrace higher standard deductions: Enjoy potentially lower taxes thanks to wider tax brackets and increased standard deductions, which offer a simpler way to claim write-offs…

As we navigate through 2024, uncertainty looms over the global economy and financial markets. While we cannot predict the future, one thing we can control is our approach to taxes. Strategic tax planning can help you keep more of your hard-earned money and position your savings for growth. Here are seven tax-smart steps to consider early in the year: Seize Available Deductions: The IRS has widened tax brackets and increased standard deductions and savings incentives for 2024. Assess your itemized deductions, including state and local taxes, medical expenses, mortgage interest,…

Tax season is upon us, with tax forms flooding inboxes and mailboxes. Tackling your 2023 tax return may seem like a daunting task, but starting early can make the process less stressful and potentially save you money. Whether you’re anticipating a refund or preparing to meet your tax obligations, there are compelling reasons to get a head start on your taxes this year. 1. Beat the Scammers Filing your tax return as soon as possible is a powerful defense against tax-related identity theft. By submitting your legitimate return before criminals…

Introduction: In the intricate world of personal finance, navigating the myriad of tax breaks can significantly impact your household’s financial health. Among the gems offered by the US government is the Child Tax Credit (CTC), a powerful tool designed to ease the financial burden of raising children. As we delve into the details of the CTC, you’ll discover how this credit can be a game-changer for your family’s bottom line. Understanding the Child Tax Credit 1. What is the Child Tax Credit? The CTC is akin to a discount on…

Introduction: As we step into the new year, it’s the perfect time to reassess and boost your financial well-being. Regardless of your age, taking charge of your finances now can set the stage for a smooth transition into retirement. In this blog post, we’ll explore five crucial steps to power up your finances in 2024 and ensure a secure financial future. Review Your Personal Balance Sheet: The foundation of a robust financial plan lies in understanding your net worth. Begin by creating two lists – one for your assets and…