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Politics These year-end tax moves may help you save, regardless of what happens in Congress

10:00  24 september  2021
10:00  24 september  2021 Source:   cnbc.com

House Democrats unveil plan to raise taxes on Amazon, Microsoft, and other wealthy corporations and Americans making over $5 million

  House Democrats unveil plan to raise taxes on Amazon, Microsoft, and other wealthy corporations and Americans making over $5 million The House Ways and Means's plans to hike corporate taxes to 26.5% and capital gains to 25% are all more modest than Biden's original proposals.On Monday, Democrats on the House Ways and Means Committee circulated a draft of its tax proposals for the nascent reconciliation plan. They aim to approve it along party-lines without any Republican support because the reconciliation process only requires a simple majority vote.

These year - end tax moves may help you save , regardless of what happens in Congress . Published Thu, Sep 23 20211:40 PM EDT. Many popular tax -planning strategies are on the chopping block as Democrats debate how to pay for their .5 trillion spending package. However, now is the time to consider year - end moves to lower next year's tax bill, regardless of what happens in Congress . " Year - end tax planning should be done every year — not just when there are impending legislation changes," said Marianela Collado, a certified financial planner and CPA at Tobias Financial

Filers may consider tax -loss harvesting, which allows them to offset capital gains with losses. Investors with more losing assets than winners may even deduct up to ,000 against their regular income. “If you are facing an unusually high-income year or had tremendous losses, this might be a good strategy,” said Ashton Lawrence, a CFP with Goldfinch Wealth Management in Greenville, South Carolina. While there are other tax moves to consider, many advisors are monitoring plans from Congress and waiting for the final legislation before pulling the trigger on year - end plans.

  • Many popular tax-planning strategies are on the chopping block as Democrats debate how to pay for their $3.5 trillion spending package.
  • However, it's still a good time to consider year-end moves to trim next year's tax bill.
  • Still, filers may need to pivot once Congress finalizes new tax policies, financial experts say.
a laptop on a table © Provided by CNBC

Many popular tax-planning strategies are on the chopping block as Democrats debate how to pay for their $3.5 trillion spending package. However, now is the time to consider year-end moves to lower next year's tax bill, regardless of what happens in Congress.

"Year-end tax planning should be done every year — not just when there are impending legislation changes," said Marianela Collado, a certified financial planner and CPA at Tobias Financial Advisors in Plantation, Florida.

Democrats try delicate tax maneuver for $3.5 trillion bill

  Democrats try delicate tax maneuver for $3.5 trillion bill WASHINGTON (AP) — To pay for the massive social plans that President Joe Biden envisions, House Democrats began serious work Tuesday on a maneuver worthy of the most agile circus acrobats. They’re looking to squeeze revenue from the elite 2% of Americans who earn more than $400,000 a year while leaving untouched everyone else — who Biden has pledged won't see any tax increases. Republicans, as opposed to those tax increases as expected, also turned their anger on Tuesday against proposed tax breaks they portrayed as subsidies for wealthy elites rather than help for the poor and middle class.

Filers may consider tax -loss harvesting, which allows them to offset capital gains with losses. Investors with more losing assets than winners may even deduct up to ,000 against their regular income. “If you are facing an unusually high-income year or had tremendous losses, this might be a good strategy,” said Ashton Lawrence, a CFP with Goldfinch While there are other tax moves to consider, many advisors are monitoring plans from Congress and waiting for the final legislation before pulling the trigger on year - end plans. “The political winds are very difficult to read right now,” Markowitz said.

Year - End Tax Planning Moves . Here are some ways you can save on your taxes before the calendar flips to Health Savings Accounts (HSAs) are tax -advantaged savings accounts designed to help their owners A short consultation may end up helping you save a substantial amount of money on your taxes . “We are concerned that the deadly spike in India is a precursor to what will happen if those

While it's difficult to predict how tax law changes will shake out in Congress, here are some strategies to consider as the year winds down.

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Offset investment gains with losses

Filers may consider tax-loss harvesting, which allows them to offset capital gains with losses. Investors with more losing assets than winners may even deduct up to $3,000 against their regular income.

"If you are facing an unusually high-income year or had tremendous losses, this might be a good strategy," said Ashton Lawrence, a CFP with Goldfinch Wealth Management in Greenville, South Carolina.

A simpler global tax plan needed

  A simpler global tax plan needed As popular as restructuring the corporate tax landscape may be, finding practical ways to do so remain highly problematic.One proposal in the redesign advanced by leading industrial countries in the Organization for Economic Cooperation and Development (OECD) calls for a global minimum corporate tax rate of 15 percent. Another calls for reallocating and taxing a slice of profits in countries where corporate giants sell their goods or services, rather than where they produce.

Year - end tax moves may be even more vital this year — before tax breaks and other provisions change under the pending Tax Cuts and Jobs Act. Senate Republicans pushed the latest version of their tax plan through early on Saturday. There are some moves that individuals may want to consider making before the end of the year based on the revisions that are being considered. But experts warn that any moves should be made with the latest Washington happenings in mind. "Make sure you 're paying attention to what the latest versions of the bills are," said Tim Steffen, director of

To qualify for these tax - saving deals, you must buy (not lease) a “heavy” vehicle. That means one with a manufacturer’s gross vehicle weight rating (GVWR) above 6,000 pounds. However, the Republican presidential nominee Donald Trump would install a maximum 15% rate on business income. His Democratic rival Hillary Clinton could raise your rate, but that would probably only happen if the Democrats also control Congress . With those thoughts in mind, consider the time-honored strategy of deferring income into next year while accelerating deductible expenditures into this year — if you

However, those hoping to offload and repurchase the same assets need to be aware of the so-called wash-sale rules, which prevent someone from deducting a loss if they repurchase "substantially identical" investments within 30 days.

Currently, wash-sale rules don't apply to cryptocurrency. But House Democrats want to close that loophole, effective Dec. 31.

Roth conversions

Another year of unsteady income has prompted tax advisors to discuss so-called Roth conversions with clients.

This tactic allows someone to convert funds in pre-tax individual retirement account or 401(k) to an after-tax Roth IRA. Investors owe levies on the converted money, but the Roth IRA provides tax-free future growth.

"If you had a particularly lousy 2021, you might be better off eating some taxes now," said enrolled agent Adam Markowitz, vice president at Howard L Markowitz PA, CPA in Leesburg, Florida.

Democrats may torpedo their big plan: Shielding billionaire wealth, making it tougher to get aid

  Democrats may torpedo their big plan: Shielding billionaire wealth, making it tougher to get aid Corporate lobbyists fight back — and it looks like Rep. Richie Neal and Sen. Joe Manchin are doing their bidding Bernie Sanders and Joe Manchin Photo illustration by Salon/Getty Images

This may increase your taxes this year , but will lower taxes years later. You would take some of your money in a tax -deferred vehicle like an IRA and convert it to a tax -free Roth IRA. The IRS will generally tax you on the amount you convert as ordinary income. One warning is that there is nothing simple about taxes and some of these moves can backfire. For example, the tax gain harvesting can result in higher Affordable Care Act health care premiums. So seek competent tax advice. A second warning is that tax law is always subject to change, so pay attention to who wins the presidential election and

“ Year - end tax planning can make a big difference, resulting in savings of thousands or even hundreds of thousands of dollars," says Karen Goodfriend, a CPA with KK Wealth Advisors, LLC in Los Altos, Calif. 1. Be smart about charitable donations. If you itemize your taxes , you can take a write-off for money that you give to charity, as long as you get a receipt and a written statement from the charity. Here’s how it works: Instead of writing a check for ,000 to a favorite charity, you could transfer a stock to a charity’s brokerage account that you purchased for ,500 but is now worth double that amount.

The move may be attractive as House Democrats float repealing Roth conversions for those making more than $400,000 per year ($450,000 for married couples filing jointly).

Charitable giving

Philanthropic investors may also consider a year-end charitable gift.

With a $12,550 standard deduction for single filers ($25,100 for couples filing together) in 2021, it's tougher to itemize and claim the write-off. But many combine multiple years of donations, known as "bunching," to clear the standard deduction thresholds.

Retirees age 70½ and older may consider a so-called qualified charitable distribution, a direct payment from pre-tax IRAs, which doesn't count as taxable income.

Someone age 72 and older may use it to satisfy their annual required minimum distribution.

"The qualified charitable distribution is a valuable gifting strategy if you want to give to charity in a tax-efficient manner," Lawrence said.

Monitor legislation

While there are other tax moves to consider, many advisors are monitoring plans from Congress and waiting for the final legislation before pulling the trigger on year-end plans.

"The political winds are very difficult to read right now," Markowitz said.

Democrats are weighing higher income and capital gains taxes, a lower exemption for estate and gift taxes, among other proposals targeting the wealthy.

"It just seems like everything we do for our high-net-worth clients is under fire," Collado added.

Five amazing figures on the taxes of French .
© Archives West-France 63%: This is the proportion of French that still use paper for all or part of their tax documents. Photo Stock Illustration. Each year, the Directorate General of Public Finance, or DGFIP, takes stock of its activity. An encrypted analysis that reveals some disregarded data about taxes and taxes ...

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