How the Wealthy Can Pay Less Tax in 2019

The Tax Cuts and Jobs Act was signed into law in late 2017, effectively lowering the tax bracket for America’s highest earners from 39.6% to 37%. Most us, however, are somewhere between 22% and 32% and we don’t pay taxes on everything we make. Nonetheless, the new law has made us all pause and rethink how we save and give. We’re looking at creative ways to to protect what you have and bring down taxes.

Here’s what the wealthiest among us are doing:

  1. Not waiting until the end of the year to plan; 
  2. Having regularly scheduled meetings with their financial advisor;
  3. Owning land that can be taxed as a “conservation easement” or green space;
  4. Owning stocks and working with their investment advisor to actively manage capital gains and losses for tax advantages;
  5. Structuring a limited liability company, LLC, to manage investments and deducting management fees as a business expense;
  6. Taking advantage of the temporary doubling of exemptions (until 2025) for estate and gift deductions to lower taxable income;
  7. If you’re a business owner, consider a defined-benefit plan (like a pension) to set aside more tax-deferred money than you can in a regular 401(k).

Of course, these ideas to protect and grow income by lowering tax liability may not work for your particular income and tax bracket, but it may pay to find out now. There’s still time to weigh options and make changes. Call our office for an appointment.

PS: You can still take a deduction for charitable giving, but you have to itemize your taxes and the TCJA nearly doubled the standard deduction to $12,000 for individuals and $24,000 for married couples, making it a higher bench over which to climb.

“Sell All That You Have”

A rich young man said to Jesus, “What must I do to inherit eternal life?” Jesus answered, “Sell all that you have and give to the poor.” Mark 10:21

What? Sell my home, my cars, the sofa, the lawnmower, clothing, shoes, and all that stuff in my garage? You’ve got to be kidding!

When we, as wealthy Americans (and we are all wealthy as compared to the world population), read this Bible passage, how does it make us feel? Confused mostly, because it can’t be possible for God to wish that we actually sell all that we have and, after it’s all gone, still give more to the poor!

If we have “stuff” and money, are we doomed to the eternal fire because we disobeyed Jesus?

Look at the passage again, the rich young man asked Jesus how to inherit even more than he already had. In addition to his worldly goods, he also wanted to “inherit” (get without working for it) eternal life. 

Jesus was teaching the young man a valuable lesson. Serve the Lord, not money. Comparing the concept of eternity, endless time, with the 70 – 90 years of earthly life, can put a few things into perspective. We also learn in 1 Timothy 6:17-19, that we can serve God and His people by means of our money so as to “win the life that is true life.” Bottom line, material wealth should never become our god, nor should our greed prevent us from reaching out to the needy.

What The Notre-Dame Fire Taught Us

We were all touched in some way watching the holy cathedral of Notre-Dame de Paris in flames. Early news reports were catastrophic. “The entire cathedral has burned to the ground. Everything is gone!” The world was stunned. Not just the French, not just the Catholics. Everyone.

When the smoke cleared, the world also collectively breathed a sigh of relief. A news reporter said that in our lifetime, we may still have the chance to visit Notre-Dame Cathedral. 

We had seen on the media what appeared to be flames tearing through the roof as if coming from the interior of the church. The source of the flames was, in fact, from the timber and lead roof installed in the 13th century. The interior of the church, for the most part, was not involved.

The most dramatic moment captured on film had to be the collapsing spire. For Americans, it was an emotional scene recalling painful memories of our own Twin Towers. The spire was not the original spire. That the spire had been previously destroyed by weather in the 1700s and rebuilt in the mid-1800s as a larger more ornate version of the original made it no less sad. 

We rejoiced when we learned that most of the cathedral and its statues and architecture and windows were still intact and, because of the outpouring of generosity from around the world, it will be rebuilt to its original splendor, if not better. 

Like 9/11, the Notre Dame fire shook many to their core. How could God allow this to happen? How are we to react?

We have witnessed a worldwide outpouring of compassion. God and His Church were headline news during Holy Week. We became family with the French people and with those of all faiths who lamented Paris’s loss, for whatever reason. For that one day, we were touched and united by tragedy.

In Louisiana, there was a $1.3 million surge in donations to rebuild the three historically black churches burned down by arsonists. Comfort, hope, life. 

“For the Lord has comforted his people and will have compassion on his afflicted.” Isaiah 49:13