Adam Bar, Risk & Wealth Manager

Which financial tool is the most important is one of my favorite questions, and Often I ask clients like, which is better, a swiss army knife or a chainsaw? And, many say, it depends. The same is true for the financial tools available, and to nail down what is the most important financial tool can fit for some but not all, as it depends on one's financial situation, goals, timing, and much more. To overcome this ever-changing landscape called "Life", we meet with our clients annually because the financial tool that was the home run this year may not be next year. As life changes and transitions occur, planning proactively can give you the cutting edge in real estate, business, tax, financial, legal, and much more. Remember is that it is not only what you grow or make that is important; it's what you get to keep that counts. The information in this material is not intended as tax, legal or financial advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by RTB Advisors to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

There are several factors to consider when it comes to capital gains and providing a simple calculation may not be the best option, as everyone's situation is unique. Short-term and long-term capital gains have different tax percentages and applications. The classification of capital gains can also get complicated thus working with a tax professional, legal professional, and a financial team like RTB Advisors can help navigate these complex waters. When meeting clients, we can provide proper calculations of your capital gains by working with your tax professional, and provide strategies to minimize them, which can benefit clients both now and into the future. If you want to view an estimate of your gains, please use RTB Advisors Capital Gains estimator at the link below and schedule a call to discuss your situation further. The information in this material is not intended as tax, legal or financial advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by RTB Advisors to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

There are a number of tax mitigation strategies for high earners, and like the question, which is the best financial tool, the same is true for the best way to reduce taxable income. There are ways to layer a number of strategies if it fits the client's situation, goals, and income. Below are ideas to think about, and there are more, so it is best to schedule a call, and we can explore what opportunities might fit best for your situation. One thing to keep in mind is that Tax-deferred instruments are not the same as tax-exempt, like Roth IRA or HSA accounts. By using tax-deferred accounts, there will be tax consequences associated with the distribution of the assets at some point. Yet, tax-deferred accounts can be an effective tax strategy for high-income earners to reduce tax liabilities. Additionally, tax-deferred accounts may benefit by compounding returns faster by sheltering income from current taxation. Few Examples include: Contributing to a 401(k), 403(b), or 457 plan can be one of the easiest ways to defer investment income. For high earners business owners or entrepreneurs, there are tools like SEP IRAs or Defined Benefit or Defined Contribution Plans that may allow for large business or tax deduction and contributions to the plan that can become substantial wealth building, growth, accumulation, and deferral instruments. One of the most underutilized tax deferral strategies by high-income earners because of the higher limits that can be invested and be credited interest or dividends. You generally make contributions with after-tax dollars, but the money can grow tax-deferred and potentially tax-free distribution, with withdrawals up to the amount of premiums paid are not taxed. Have you thought about contributing to a 529 Education Plan? You might pay federal taxes on your contributions, but generally, the money grows tax-free, and distributions for qualifying educational expenses would not be taxed. Generally, there are no annual contribution limits, but this may change in 2022. You could adjust the assets in your portfolio to change the way your income is taxed. For example, changing your business structure can be an effective tax reduction strategy for high-income earners if you own a business. Here are some options to consider: Consider tax-exempt bonds. Interest income from tax-exempt bonds is excluded from Medicare surtax calculations and not subject to federal income tax. Even better, municipal bond interest on bonds purchased in your state of residence is state and federal income tax-free. Be mindful of interest rate increases as they could negatively affect your returns. Time your gains or losses for capital gain mitigation. Effective tax strategies for high-income earners should include managing the timing of significant gains so you aren't pushed into the 20% capital gains bracket or subject yourself to the Medicare surtax. Establish and contribute appreciated positions to a CRT or charitable remainder trust. Charitable remainder trusts disperse income to beneficiaries for an established period of time before the remainder is donated to charity. By contributing a long-term, appreciated asset, you avoid incurring tax on the gains and get a deduction based on the current value of the gift. Explore Qualified Opportunity Zone Fund (QOF), which was created in the Tax Cuts and Jobs Act, and allow you to defer taxes on capital gains until 2026 by investing them in a qualified opportunity zone or QOF within 180 days of the sale. After that, taxes can be reduced by holding onto the investment for at least five years. For individuals who are selling property or have capital gain tax, they may consider a 1031 exchange or a DST. Delaware Statutory Trust refers to a legal entity that is formed under Delaware law that may allow investors to own undivided fractional ownership interests in professionally managed, institutional-grade real estate offerings around the United States. The interests of the DST may be owned by individuals or by certain entities. These are just a few quick tools that can be used; let's discuss your situation and how we can bring you value in reducing your taxable income or enhancing your business deductions. The information in this material is not intended as tax, legal or financial advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by RTB Advisors to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.