Tax Planning Strategies
Almost every financial action may have tax consequences. So developing and implementing tax-efficient strategies should be integrated with your total financial plan and driven by your overall financial goals. Our wealth advisors review your annual tax return, calculate cost-basis, and consider your investments and charitable giving in order to offer recommendations specific to your personal circumstances.
Considering the proposed tax changes, should you be bracing for higher taxes? How concerned should land owners and business owners be?
We are carefully watching the proposed tax law changes, such as the elimination of the stepped-up basis, capital gains hike rate for filers with incomes above $1 million, and a phase out of small business income deductions over $400,000. What could the proposed tax law changes mean for you?
Originally recorded March 2, 2021 at our Economic and Investment Update webinar.
Qualified Charitable Distribution (QCD)
If you are age 70½ and older, you may want to consider a Qualified Charitable Distribution (QCD). This involves making a direct transfer from your IRA to a qualified charity, including all or part of your Required Minimum Distribution.
VIEW OUR TAX PLANNING REPORT
Helpful tax-time strategies, including information about the CARES Act and SECURE Act that could affect your 2020 and 2021 taxes.
YEAR-END TAX PLANNING WORKSHEET
A list of important deadlines, documents you may need, and strategies to consider.
YEAR-END TAX TIPS FOR BUSINESSES
Help improve your bottom line with these strategies.
ACCESS AND EXPORT TAX DATA
Information about exporting tax data from your Raymond James brokerage accounts
Tax Rates
Please note: Tax rates are for the 2021 tax year and will be updated to the 2022 rates after April 15, 2022.
MARRIED FILING JOINTLY
| Rate | Minimum | Maximum |
|---|---|---|
| 10% | $0 | $19,900 |
| 12% | $19,901 | $81,050 |
| 22% | $81,051 | $172,750 |
| 24% | $172,751 | $329,850 |
| 32% | $329,851 | $418,850 |
| 35% | $418,851 | $628,300 |
| 37% | $628,301 | N/A |
MARRIED FILING SEPARATELY
| Rate | Minimum | Maximum |
|---|---|---|
| 10% | $0 | $9,875 |
| 12% | $9,876 | $40,125 |
| 22% | $40,126 | $85,525 |
| 24% | $85,526 | $163,300 |
| 32% | $163,301 | $207,350 |
| 35% | $207,351 | $311,025 |
| 37% | $311,026 | N/A |
SINGLE
| Rate | Minimum | Maximum |
|---|---|---|
| 10% | $0 | $9,950 |
| 12% | $9,951 | $40,525 |
| 22% | $40,526 | $86,375 |
| 24% | $86,376 | $164,925 |
| 32% | $164,926 | $209,425 |
| 35% | $209,426 | $523,600 |
| 37% | $523,601 | N/A |
HEAD OF HOUSEHOLD
| Rate | Minimum | Maximum |
|---|---|---|
| 10% | $0 | $14,200 |
| 12% | $14,201 | $54,200 |
| 22% | $54,201 | $86,350 |
| 24% | $86,351 | $164,900 |
| 32% | $164,901 | $209,400 |
| 35% | $209,401 | $523,600 |
| 37% | $523,601 | N/A |
2021 Federal Estate Tax Levels
At death, a surviving spouse's estate will owe estate taxes on the net value that exceeds the annual exemption:
| Year | Exempt from Tax | Estate-Tax Rate |
|---|---|---|
| 2021 | $11,700,000 per person with portability | Top rate of 40% |
REPORT A QUALIFIED CHARITABLE DISTRIBUTION (QCD) ON YOUR INCOME TAX RETURN
If you are age 70 ½ and older you can make a Qualified Charitable Distribution (QCD) in the form of a direct transfer of up to $100,000 directly from your IRA to a charity, including all or part of your required minimum distribution (RMD). In order to qualify for tax tear 2020, the funds must have come out of your IRA by December 31, 2020.
Be sure to take the QCD amount off of your 1099, or you could end up paying more in taxes.
To report a qualified charitable distribution on your Form 1040 tax return, you generally report the full amount of the charitable distribution on the line for IRA distributions. On the line for the taxable amount, enter zero if the full amount was a qualified charitable distribution. Enter "QCD" next to this line. See the Form 1040 instructions for additional information.
You must also file Form 8606, Nondeductible IRAs, if:
You made the qualified charitable distribution (QCD) from a traditional IRA in which you had basis and received a distribution from the IRA during the same year, other than the qualified charitable distribution; or
The qualified charitable distribution (QCD) was made from a Roth IRA.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.