The tax codes are forever changing from year to year and beginning in 2013 you may face two additional taxes resulting from the Health Care Act. These new taxes will impact you if you are:
Medicare Contribution Tax
You and/or your trust will face a 3.8% tax on the lesser of the net investment income or excess MAGI over the thresholds above
Medicare High Income Tax
You will face a 0.9% tax on earned income over the MAGI thresholds above.
There are only two ways to increase profits and that is to cut expenses or increase revenue. The government has decided to do both. Is your portfolio ready for the tax hikes?
If you are a passive investor with a portfolio of blue chip stocks paying a dividend, these new taxes will cut into your profit. If they decide to keep the “Bush Tax Cuts” in place, you will have to pay 18.8% (based on long term capital gains tax) instead of 15% the current rate if you are in the thresholds above. However, the chances of taxes staying at these levels are unlikely, which means the changes to the tax codes can have a major effect on your investments. You should be aware that many mutual funds have distributions that cause tax implications even if the fund had a negative return for that given year.
Start thinking about the benefits of tax advantaged investment strategies such as:
Schedule a consultation with John J. Fiorito today at 212-785-4377 x224 to talk about what you can do to alleviate taxes in your portfolio. Remember, “It is not what you earn, but it is what you get to keep”.
BE Prepared, BE Educated, and BE Proactive
As a reminder, RMR Wealth Management will be hosting the 9th Annual Marc Mayer Memorial Golf Tournament on Monday August 27th, to benefit the Multiple Myeloma Research Foundation. RMR Managing Partner Brian Mayer is a Featured Supporter of the foundation in honor of his late father, Marc.
John J. Fiorito
Securities offered through Dinosaur Securities, LLC Member FINRA, SIPC, NFA.
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication. RMR Wealth Management, LLC does not provide legal, tax, or estate-planning advice. For questions about a specific situation, please consult a qualified adviser.