TAXES ARE ON SALE THROUGH 2025!
Written by Mike Frost
WHAT? Taxes are on SALE? Whatever does that mean?
The 2017 Tax Cuts and Jobs Act basically put TAXES ON SALE through 2025. In 2026, unless Congress makes changes, the TAX rates will revert back to the HIGHER rates of 2017. That means we have until the end of 2025 to pay taxes at a KNOWN LOWER RATE.
SO WHAT? Large TAX DEFERRED accounts (401k, 403b, IRA, etc.) can KNOW FOR CERTAIN how much tax you will owe on these accounts through 2025. All tax deferred accounts are JOINTLY owned……that is right, you and UNCLE SAM. The only thing we do NOT know is HOW MUCH Uncle Sam will take. We DO know how much UNCLE SAM will take up until 1/1/2026, the current LOWER tax rates.
What does that mean for me? It could mean that you move some or all of these TAX DEFERRED accounts to a TAX-FREE account (can you say ROTH IRA?). You will pay TAXES on any move so please consult a financial advisor and/or accountant before making ANY decisions.
Would you rather pay a KNOWN tax rate today or wait and pay an UNKNOWN tax rate in retirement? National debt just hit an all-time high of over $22 TRILLION. So, do you think tax rates will be LOWER in retirement or HIGHER (somebody will pay for the national debt).
Pay Uncle Sam now at a KNOWN rate, then let your assets grow TAX FREE in and through retirement. Or do nothing and HOPE the tax rates are the SAME or LOWER in retirement.
MACH 1 FINANCIAL GROUP can help you make an informed decision. Give us a call at 479.876.2100.