Tax Elimination vs. Tax Deferred
Denver Nowicz
?? LinkedIn Top Voice Economy & Finance ┃ 25 Years Helping People Build Financial Confidence
Every year high income earners write big checks to the IRS. This is usually after they have met with their CPA. Most advice centers on using the 401k, SEP, or Defined Benefit Plan and defer the taxes you owe. (Meaning pay them later.)
Once you get income over $300k tax deferred plans start to lose their luster. Not only is the contribution amount not enough to really move the needle for wealth creation, the taxes still have to be paid. What will the tax rate be when you retire? Higher or lower?
Even if you get the small deduction, what about the other $100k, 200k, 500k in taxes due?
You will never earn a rate of return high enough on your investments to make up for the wealth lost from taxes.
This does not mean you don’t defer some of the taxes you owe, but for too many this is the only tax strategy used.
The simple truth is the tax code can help you massively create more wealth or punish you for success.
99% defer. The 1% eliminates.
Please reach out if you have questions!
Tax & Wealth Strategist | Author | Founder
4 年Great insights as always Denver Nowicz, Fiduciary Taxes must be addressed or will do nothing but get bigger and bigger!
I help Medical Professionals Build Wealth by Implementing Strategies to Secure Investments in All Economic Climates
4 年Great word picture!
Life Insurance Consultant
4 年Great post. Thanks for sharing!
The Most Interesting Man in Tax ... AccountingToday’s Top 100 Most Influential People in Accounting. #Philanthropist #SerialEntreprenuer #GonzalezFamilyOffice #TaxGoat?? #TaxRecoveryExperts
4 年Really thank you for writing about it, it’s awesome!
Senior Consulting Partner at Up Market Research and DataIntelo | Market Research | New Business | Consulting | Sales | Growth
4 年That looks interesting, thanks for sharing Denver!