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Start Planning to Reduce Taxes Now

     Now that it’s tax season, it might be a good idea to start planning to reduce taxes right now by reviewing your IRS Form 1040 with your financial advisor or tax professional.  A review of Form 1040 can reveal opportunities to save on taxes you may have missed before.  For example, the difference in rates between ordinary and qualified dividends for a taxpayer in the highest tax bracket is 19.6%. Taxpayers in lower brackets pay only 15% on long term capital gains and qualified dividends versus regular income tax rates for short term gains and non qualified dividends. Short term capital gains distributed by mutual funds are taxed as ordinary dividends, so your choice of investments and investment vehicles can make a difference.
     Capital gains should be offset by losses to the greatest extent possible. An effective tax loss harvesting program will take advantage of losses year round and not just at the end of the year.  Other tax saving opportunities include using IRA distributions to make charitable gifts, reducing your exposure to the Alternative Minimum Tax and limiting taxes on Social Security.  The Medicare Surtax adds 3.8% to net investment income over certain thresholds. If you have income from a trust, the highest rate of 39.6% applies to income over $12,300.  Planning now will save dollars later.
     If you would like to schedule a 1040 review, please give me a call.


About LPL Financial
LPL Financial (Nasdaq: LPLA) was founded on the principle that the firm should work for the advisor, and not the other way around. Today, LPL is a leader in the markets we serve,* supporting nearly 20,000 financial advisors, and approximately 800 institution based investment programs and 500 independent RIA firms nationwide. We are steadfast in our commitment to the advisor-centered model and the belief that Americans deserve access to personalized guidance from a financial advisor. At LPL, independence means that advisors have the freedom they deserve to choose the business model, services, and technology resources that allow them to run their perfect practice. And they have the freedom to manage their client relationships, because they know their clients best. Simply put, we take care of our advisors, so they can take care of their clients

*Top RIA custodian (Cerulli Associates, 2020 U.S. RIA Marketplace Report); No. 1 Independent Broker-Dealer in the U.S (Based on total revenues, Financial Planning magazine 1996-2021); No. 1 provider of third-party brokerage services to banks and credit unions (2020-2021 Kehrer Bielan Research & Consulting Annual TPM Report); Fortune 400 Company as of June 2021. LPL and its affiliated companies provide financial services only from the United States.

Jones & Company and LPL Financial are separate companies.

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