Tax season is officially upon us. This has many of us wondering what tax rates will look like in the future and how we can prepare now. Fiduciary financial planner Mike Reeves of Strategic Wealth Designers joined us on the newscast to discuss. It is likely that we will see tax rates rise in the future.
“Based on historical tax rates and government spending, we’ll likely see rates rise,” Reeves says. “The government uses taxes to pay for day-to-day expenses and obligations, which include Social Security and Medicare. It isn’t guaranteed when or how much tax rates will increase, but start planning for it now?”
To prepare for potentially increasing tax rates now, you can save in tax-free accounts. Consider utilizing a Roth IRA for retirement saving. This will help you avoid paying taxes when pulling money out of the account later on, when tax rates may be higher.
“For this year, make sure to mark your calendars for April 15th,” Reeves says. “You might have to take into account some new factors this year when filing your taxes, such as stimulus checks, PPP loans, and unemployment benefits. Some viewers may be able to use a service like TurboTax to file online for free or consult a tax professional if their situation is more complicated.”
Advanced tax planning can help you improve your situation when it comes time to retire. To see additional stories surrounding business and economic news for the Indianapolis area, visit https://CBS4Indy.com/Strategic-Wealth) and if you have a question for Mike send an email to email@example.com.