We are asked frequently by our clients whether they should contribute to a Roth or a traditional IRA (or if they should consider converting traditional IRA assets to a Roth. And while there are myriad variables to consider, one of the more succinct responses we’ve encountered is the rhetorical question: would you rather be taxed on the seed or the harvest?
Benjamin Franklin’s famous observation “in this world nothing can be said to be certain, except death and taxes” is an often-quoted opening remark when discussing the estate tax, so please forgive the quip. And yet, while death and taxes remain certain, the nature of the tax associated with death is less so. The federal estate and gift tax regime (often referred to jointly as the transfer tax regime) is a political football that gets tossed around with predictable regularity. While our clients carefully prepare for the future, changing winds in Washington can and often do result in uncertainty.
30,000’ Level: Taxes, Broadly
Our clients ask us a lot about how they can be tax efficient. That can mean a lot of different things, of course, because there are many forms of taxes. They could be thinking about property taxes, sales taxes, income and capital gains taxes, or wealth transfer taxes (taxes on wealth that is transferred from one person to another). And within these types of taxes, there are also levels of tax – local, state, and federal taxes to boot!
Good afternoon, we wanted to share some current thoughts on the markets and
portfolio construction given this challenging investment environment.
We wanted to provide an update with our latest thoughts given the continued volatility across capital markets and the escalating situation in Russia / Ukraine.
We feel fortunate to be a couple of weeks delayed in translating our thoughts in writing for the year ahead since the investment landscape has changed considerably since the beginning of this year.
About six weeks ago, we wrote a summary about some of the key personal tax elements to proposed tax law changes introduced by the US House Ways and Means Committee on September 13, 2021. Much has changed since then, and the purpose of this writing is to provide a further update based on the latest Congressional revisions to that proposal.
By now, you’re certainly aware that the House Ways & Means Committee released a mere 881 pages of legislative text last week containing several proposed changes to the current federal tax regime that would significantly impact wealthy Americans in a number of ways.
We suspect that a common conversation topic over the final weeks of the year will be how glad people are to turn the page on 2020 and begin a new year.
Each year investors like to reflect upon their investment portfolios, and we find this to be especially true at the end of a decade. As always, the last decade was full of countless surprises from an investment perspective.