How will tax increases affect your household this year? Advice from Steve Sexton
Financial adviser Steve Sexton is the host of his own radio show called “Winning In Life.” Steve is the President of Sexton Advisory Group and he is also involved with many local charities around San Diego and the Southern California region. Each week on the show, he provides his listeners with expert advice in all areas of financial planning and he also invites guest speakers to the show to talk about other important topics ranging from health and charity, to travel and much more. Tune in every Sunday morning at 9:00 KCBQ 1170 AM to hear the show live.
It’s finally time to put 2012 in the past and move on to 2013! For most people, a new year is a fresh start and a time of change in your life. On this week’s episode, Steve explains how this New Year could bring changes to your tax bracket as well. The government is still figuring out how to handle the fiscal cliff, but the tax portion of it has been decided: For higher income households ($400,000/year for individuals and $450,000 for families), the tax rate will increase from 35% to 39.6% for this New Year. Other things that higher income households will face are capital gain and dividend rate increases to 20% and estate taxes from 35% to 40%.
Steve says that although this might be good news for households making under $400,000, these tax cuts will most likely not stay permanent. There is still a huge debt ceiling debate that is not being dealt with. Debt is getting bigger and bigger and over the next two months, we will see heated debates about how to lower our deficits. According to Steve, tax cuts are never permanent because once the government figures they need more revenue, they will start to decrease tax cuts. The important thing here is to realize that these taxes will eventually affect every single household. It’s vital now more than ever to figure out how these taxes might affect you.
One other important tax increase for higher income households is the investment tax increase to 3.8%. Steve says this will affect retirees more than it will affect people who are working but it can also hit you in other ways like if you happen to sell your home, for instance. Now is the time to sit down and figure out how taxes will affect your investments. Find out all of the internal fees, take a look at how your taxes work. The best way to be prepared for all of these tax increases, in Steve’s opinion, is to meet with all of your financial advisers, get them all on the same page, and make sure your financial stance is in order.
If you are interested in learning more about this crucial topic, contact Sexton Advisory Group for more information. Listen to the live show at www.winninginliferadio.com. If you have any additional questions, submit them here at Winning In Life Radio. If Steve decides to answer your question live you’ll win a $50 American Express gift card!