taxes

Put Politics Aside and Consider Trump’s Tax Plan a Gift

No matter your political party, there could be some opportunities ahead for you to reduce your tax bill. Be ready to take advantage of them.

The tax plan President Donald Trump unveiled back in April was short on details but long on potential for retirees and pre-retirees.

Trump is also proposing the elimination of the alternative minimum tax, which is typically leveled against retirees or pre-retirees in northeastern states where state and property taxes are high. He wants to get rid of the estate tax altogether, which would allow certain high-net-worth taxpayers to move assets into trusts without any tax liability.

Even the rare individual whose taxes would increase under Trump might be able to override the negative implications with proper planning.

It doesn’t matter if you’re a Republican or a Democrat — if Trump makes these changes stick, even for a little while, you should be prepared to take advantage. Consider this endorsement of tax planning by Judge Learned Hand in 1935:

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the Treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”

This is what we do at our investment advisory firm every day. As a former tax attorney, I make it my mission to take fair advantage of tax breaks through detailed tax planning so my clients can retire with more of the nest egg they worked so hard to build. Essentially, we allow Uncle Sam to subsidize our client’s retirement by paying fewer taxes so our clients can take home more of their hard-earned savings.

Make no mistake, this tax plan could be a retirement game-changer — but you and your tax professional and financial adviser have to know how to make the most of it.

If you like President Trump, think of it as a promise fulfilled; if you don’t, consider it an olive branch. But regardless of whether you’re a Republican or Democrat, don’t look this gift horse in the mouth.

Kim Franke-Folstad contributed to this article.

About the Author

Pete Lang, Investment Adviser Representative

President, Lang Capital

Pete Lang is an Investment Adviser Representative and president of Lang Capital, with offices in Hilton Head and Charlotte, N.C. Now retired from the public practice of law and accounting after 20 years, Pete specializes in assisting his clients with investment, retirement and tax-planning strategies.. His background makes him uniquely qualified to handle the most complex retirement, tax and estate plans.

Investment advisory services are offered through Calibre Investment Management, LLC, a Registered Investment Adviser. For a list of full disclosures, please click here and scroll to the bottom of the page.

Most Popular

Where's My Refund? How to Track Your Tax Refund Status
tax refunds

Where's My Refund? How to Track Your Tax Refund Status

If you're waiting for your tax refund, the IRS has an online tool that lets you track the status of your payment.
March 2, 2021
Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer
Coronavirus and Your Money

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer

The IRS has an online tool that lets you track the status of your stimulus checks.
February 19, 2021
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021

Recommended

The Cost of Retirement Has Tripled! But a New Way of Planning Can Help
retirement planning

The Cost of Retirement Has Tripled! But a New Way of Planning Can Help

With today’s low interest rates and paltry dividends, the old way of saving for your retirement and living off your dividends and income to preserve y…
March 5, 2021
The Basics of Required Minimum Distributions: 12 Things You Must Know About RMDs
Financial Planning

The Basics of Required Minimum Distributions: 12 Things You Must Know About RMDs

Retirement savers who are 72 must start withdrawing funds from tax-advantaged retirement accounts. Here’s what you need to know about required minimum…
March 4, 2021
Taxes on Unemployment Benefits: A State-by-State Guide
state tax

Taxes on Unemployment Benefits: A State-by-State Guide

Don't be surprised by an unexpected tax bill on your unemployment benefits. Know where unemployment compensation is taxable and where it isn't.
March 3, 2021
A COVID Storm Hits Senior Living
Coronavirus and Your Money

A COVID Storm Hits Senior Living

The pandemic has created significant challenges for all types of senior living communities. Because of that, it's more important than ever to review a…
March 3, 2021