Chris Ward, CIM’s Post

One of tomorrows meetings will see me present an option for company owners to start saving into a pension via their Limited Company. They will save £192,000 towards their retirement over 4 years. This will save them £48,000 in Corporation Tax over the same period. It will save them £64,800 in Income Tax by paying this into a pension, rather than taking the cash out of the business and paying Income Tax on this money. The savings will be invested to grow tax free and over 4 years, assuming growth of 5% net of fees, their savings will be worth £212,000. They can access £53,000 (25%) of this tax free. If one of them passes away before 75, the survivor or any beneficiary will receive the entire savings tax free. Why does all this matter? They have more options when they stop working - more cash for them to enjoy as a family doing the things they love. Why am I sharing this? Because there are so many business owners who can create lasting family wealth through their business’ with the right advice. Is there anyone you know who could benefit from reviewing their finances? I’d be pleased to help.

INCREASE TO CAPITAL GAINS INCLUSION RATE   On June 25, 2024, an increase to the capital gains inclusion rate came into effect.   Individuals with capital gains of more than $250,000 will be subject to an inclusion rate of 67 per cent for the amount over $250,000 (increased from a flat 50 per cent). For corporations, all capital gains are now subject to the 67 per cent inclusion rate.   This tax change applies to profits made from the sale of secondary properties or investments, including stocks, bonds, rental properties, and family cottages. The new inclusion rate does not change the tax rate itself, which will continue to be an individual or corporation's marginal rate, but increases the taxable portion of that gain.    In a simplified example: if an individual purchased a secondary property (i.e. lake cottage) for $200,000 many years ago and sold it for $600,000 in 2024, the capital gain would be $400,000 (sale price less purchase price) of which 50% of the first $250,000 and 67% of the additional $150,000 would be considered taxable at the taxpayer’s individual rate of taxation. In this example, the new rule would result in $225,000 in taxable gains whereas the former rate would have been $200,000. *   The increase to the Capital Gains inclusion rate were included in a "Notice of Ways and Means Motion" that was approved by the House before it rose in June. The legislative details of the tax change are expected to be released later this summer, with the bill itself voted on when Parliament returns in the fall. Therefore, the approved legislation may be subject to alteration and differ slightly from the current directive.   Exemptions   The following existing exemptions continue: - A taxpayer’s principal residence - Tax-sheltered savings accounts (including:  tax-free savings accounts, first home savings accounts, registered retirement savings plans. and registered education savings plans) - Pension income or capital gains earned by registered pension plans * NOTE: this is an extremely simplified example and there are several other deductible expenses that should be considered on an individual basis. Each taxpayer should consult with their Chartered Professional Accountant for their specific circumstances.

Social Security benefits don’t change based on income received from a 401(k). But what impact could that extra income have on your tax bill? Click to learn more. #socialsecurity #money #retirementplanning https://lnkd.in/gaRgX_sx

Hello everyone! Just a reminder that the deadline for contributing to your IRA for the 2023 tax year is April 15th. Please make sure to make your contributions before the deadline to take advantage of any potential tax benefits. Additionally, did you know that you can open a Roth IRA for your children? It's an excellent way to help them start saving for their future and teach them about financial responsibility. Moreover, since they have a longer time horizon, their investments have more time to grow tax-free. Please read this article to learn more about the benefits and requirements. #RothIRA #FinancialFuture https://lnkd.in/gv65byE5

Did you know that withdrawing from a retirement account before the age of 59 1⁄2 will cause suspicion from the IRS ... unless it's for one of these reasons: 💠 A first-time home 💠 Education expense 💠 Emergency medical issue It can also lead to questions, especially if not reported on your tax return. Learn more in our blog 👉 https://lnkd.in/e87mp26 Stay ahead of the game with #protaxandaccounting #taxservices #TaxTips #TaxDeductions #TaxSeason #RetirementAccount

Are you part of the 54% of Australians missing out on potential tax savings through superannuation contributions? It's time to turn that around! 🚀💰 Here's your essential guide to understanding and maximizing tax benefits via super contributions. With the option to make concessional contributions up to $27,500 for FY24, you can significantly reduce your taxable income while gearing up for retirement. Don't miss out on the chance to bolster your savings with some savvy financial planning. 📈✨ Deadline Alert: 📆⏰ Remember to submit your Notice of Intent timely to ensure your tax deduction is recognized. Interested in diving deeper into how you can optimize your super for tax savings and a secure future? Check out the full article for actionable insights! ⤵️ Unlock your super's potential: https://lnkd.in/gBe27Vn3 #Superannuation #TaxSavings #FinancialPlanning #RetirementSavings #AustralianFinance

Social Security benefits don’t change based on income received from a 401(k). But what impact could that extra income have on your tax bill? Click to learn more. #socialsecurity #money #retirementplanning https://lnkd.in/eKirpWpP

Looking to lower your income tax bill? Our latest article, "Steps to Take Now to Lower your Income Tax Bill," offers practical tips to help you save. Effective tax planning can significantly boost your financial health. Fiduciary Trust provides expert guidance tailored to your needs, ensuring you make the best decisions for your future. Key insights: Reduce taxable income; Maximize deductions and credits; Strategize income and expenses; Leverage retirement contributions. Read the full article below. #TaxPlanning; #IncomeTax; #FinancialPlanning; #FiduciaryTrustInternational; #PersonalFinance

📊💼 Unlock Your Tax-Saving Potential! 💼📊 As tax season approaches, it's crucial for professionals to explore avenues that can optimize their financial strategies. Here are some key insights to maximize tax savings and bolster your financial well-being: 1. Strategic Retirement Contributions: Contribute to retirement accounts like 401(k)s and IRAs to lower your taxable income while securing your financial future. These contributions not only reduce your current tax liability but also offer long-term growth potential. 2. Harness Deductions: Ensure you're capitalizing on all available deductions, from mortgage interest and property taxes to charitable donations and eligible business expenses. Organized record-keeping throughout the year is key to maximizing these deductions. 3. Leverage Tax Credits: Explore tax credits such as the Earned Income Tax Credit (EITC) and Child Tax Credit to directly reduce your tax bill. Education credits and energy-efficient home improvements can also provide substantial savings. 4. Tap into Employer Benefits: Take full advantage of employer-sponsored benefits like FSAs, commuter benefits, and retirement plans. These perks not only enhance your financial security but also offer valuable tax advantages. 5. Optimize Investments: Invest strategically in tax-advantaged accounts such as municipal bonds and 529 college savings plans. Additionally, consider tax-loss harvesting to offset gains and minimize your taxable income. 6. Proactive Planning: Stay ahead of the game by regularly reviewing your financial situation and adjusting your tax strategy accordingly. Planning ahead allows you to identify opportunities for savings and mitigate potential tax burdens. 7. Professional Guidance: Tax laws can be complex, so seek guidance from a qualified tax professional who can offer tailored advice based on your unique circumstances. Their expertise can help you navigate the tax landscape with confidence. By implementing these proactive tax-saving strategies, professionals can optimize their financial outlook and pave the way for long-term success. Start maximizing your tax savings potential today and secure a brighter financial future! 💡🚀 #TaxSavings #FinancialStrategy #ProfessionalDevelopment

It seems that the access to "quick cash" from the new system is widely misunderstood. The devil is in the detail and getting advice before draw downs is important. Some general thoughts on the issues raised in the article: 1. The person contributing to retirement generally would have received a tax deduction for the contributions (subject to certain limits etc. but generally - yes). Essentially the taxes saved on the contributions when they were made are now recouped in the draw down. 2. If a taxpayer has back taxes owing, why must the draw down not cover that? Should other compliant taxpayers fund defaulting taxpayers' non compliance that access these pots? I think not. One of my first ever tax textbooks at on the first page had the following statement: "There is no equity in tax" It is a statement that has been worth remembering since then... https://lnkd.in/d88NgMYQ