Brace for Impact...From Income Tax

Dec 3, 2021 9:42:41 AM / by Michael Dailey

 

 

 

There are three kinds of income; Investment Income, income from personal activities, and employment income. When putting together a financial plan, the goal is to be as efficient as possible, and when it comes to your income, efficiency comes in the form of avoiding taxes.

 

1. Investment Income: This income stream comes from dividends, interest income, and gains from the sale of investments. It’s important to talk to your financial advisor about how to ensure you pay the least amount in taxes. There are many ways to avoid taxes, i.e., focusing on qualified dividends, investing in Master Limited Partnerships( MLP’s), holding your investments to achieve long-term capital gains, etc.

 

2. Income from Personal Activities: This income stream comes in the form of gifts, prizes, grants, etc. The federal government always wants “their share” and they take it from those receiving this income stream.

 

3. Employment Income- This the most common form of income and you can decrease taxes on this income stream with contributions to qualified retirement plans, medical plans, or other forms of tax-qualified benefits.

 

If you are a business owner, tax laws provide various forms of relief for you and your employees.

 

When it comes to taxes it’s vital that you work with your tax professional and financial advisor to ensure your tax planning allows you to be as efficient as possible.

 

 

 

 

 

Michael Dailey

Written by Michael Dailey

Michael Dailey is the Founder and CEO of InvestorKeep, a company passionate about help you save money and maximize your investments. The average investor loses well over $100K to the implications of investment fit, fees, and quality. InvestorKeep gives you an easy way to monitor investments helping you keep and earn more.