Category: Timely Topic
There has been a lot of talk about the House Ways and Means Committee’s tax proposal. Whether in The Wall Street Journal or from Take the Long View podcast guest, John Jennings’ break down of the good, the bad, and the ugly, speculation is all over the place. As a client of Hill Investment Group, you can rest assured that we are planning for all of the potential iterations.
Below we’ve reviewed the most relevant points for our clients. Have questions? Feel free to reach out to us to discuss how the potential changes may affect you. Set up a time to talk here.
|House Ways and Means Tax Proposals||Current Law|
|Top Income Tax Bracket||Increase the top individual income tax bracket to 39.6 percent. This new top bracket would start at taxable income levels of $400,000 for single filers, $450,000 for joint filers. Effective 1/1/2022.||The current top tax rate is 37 percent on taxable income over $523,600 for single filers and $628,300 for joint filers.|
|Capital Gains||Increase the statutory capital gains rate to 25 percent. Effective 9/13/2021, subject to a binding contract exception.||The current top statutory capital gains rate is 20 percent.|
|Estate and Gift Tax||Reduce to an inflation-adjusted $5 million. Effective 1/1/2022.||Inflation-adjusted $10 million ($11.7 million in 2021).|
|Roth Conversion||Eliminate Roth conversions for both IRAs and employer-sponsored plans for single filers with taxable income over $400,000 and joint filers with taxable income over $450,000.||A person can convert their eligible IRA assets to a Roth IRA regardless of income.|
Have questions? Feel free to reach out to us to discuss how the potential changes may affect you. Set up a time to talk here.
What do Britney Spears, Michael Jackson, Prince, and Tony Hsieh (Zappos!) all have in common? And no – this is not the start of a bad joke.
Each of these individuals caught our attention recently for the headlines they (or their estates) made. While we usually encourage you to “tune out the noise” and “ignore the talking heads,” sometimes celebrity gossip headlines contain valuable lessons…usually of what not to do.
The combined estates of Spears, Jackson, Prince, and Hsieh are worth nearly $2 billion. An amazing sum! Yet all of this money is trapped in battles (legal or otherwise) to distribute or manage assets. Our crew of celebs could have avoided this pain. Unfortunately, when a clear plan is not in place, unwinding disputed estates can involve paying lots of pernicious fees. A reliable team of fiduciary advisors and a solid, up-to-date plan can minimize disputes, ease the process, and reduce unnecessary costs to the estate.
If my goal is to preserve assets for my beneficiaries or charitable causes, instead of getting stuck in a prolonged legal battle, what should I do?
It’s dramatically easier, less expensive, and simpler to pay your advisory team in advance rather than have them clean up the mess afterward.
That’s why Hill gets involved, sooner rather than later, in estate planning with our clients. Whether you’re just starting or need a comprehensive review and update of an existing plan, set up a call or meeting with us – click here. Your future self, and your kids, will thank you.
A few years ago, Laura Vanderkam set out to study how 1,001 busy, successful women managed their time. Most of these women had full-time jobs, kids, and dozens of commitments. She had each of them keep a time diary for a full week—168 hours—to learn the strategies they used to keep their lives afloat.
One of the women came home on a Wednesday night to a flooded basement. Her water heater broke while she was running errands. Between calls with plumbers and coordinating a cleaning crew, the ordeal took seven hours out of her week.
“I’m sure if you had asked her at the start of the week, Could you find seven hours to train for a triathlon or mentor seven worthy people?”, she would have said what most of us would say: No. Can’t you see how busy I am?” says Vanderkam. “Yet when she had to find seven hours, she found seven hours.”
Vanderkam, whose TED talk “How to Gain Control of Your Free Time” has been viewed more than five million times, points out that time is elastic. We can’t create more time, but it will stretch to accommodate what’s essential.
“The key to time management is treating our priorities as the equivalent of that broken water heater,” says Vanderkam.
As I write this on a dreary December day, it seems like this entire past year was like those seven days when the woman dealt with her broken water heater. Instead of feeling in control, many of us found ourselves constantly reacting—to the latest coronavirus data, to the election coverage, to the volatile stock market.
The good news is that we can recalibrate and fill our days with the things that deserve to be there. But how can we make this happen? How do we find the same sense of urgency as that woman with the broken water heater?
Laura Vanderkam has a tip.
Let’s pretend it’s December 2021. It’s been an amazing year. Ask yourself what three to five things did you accomplish that made it such a great year?
Once you’ve identified those goals, break them down into manageable, bite-sized steps and put them into your schedule first—not when you “think you’ll have time.”
By designating something as a water heater-level priority, we reduce our odds of falling off the wagon, whether that’s training for a marathon or bolstering your kids’ college savings fund.
For successful, happy people, their lives are the compound effect of how they spend their time away from work. Remember, there are 168 hours in a week. Even if you’re at the office for 60 hours and sleep 8 hours a night, that leaves 52 unscheduled hours.
“There is time,” says Laura. “Even if we are busy, we have time for what matters. And when we focus on what matters, we can build the lives we want in the time we’ve got.”
Let’s all find our broken water heaters and get to work.
We can help you set or clarify your financial priorities and help you achieve them. Want to learn how? Schedule a call with us to find out.