Obama Proposals May Benefit High-Earners TheStreet.com
Updated: Jul 17, 2019
Even if you supported Barack Obama's voice for change, voted for him and are thrilled that he is our president-elect, you might be worried about your upcoming tax bill if you earn more than $250,000 as a family or $200,000 as a single person.
Obama has proposed raising taxes for those who make at least those amounts, and many of my clients and friends who fit this financial category are worried -- even if they voted for him! If you live in an expensive urban area such as New York, Chicago, San Francisco, Miami, Atlanta or Boston, it isn't that hard to reach that income level. But tack on expenses and you are like the rest of America: not much left over at the end of the month after the bills are paid.
If none of the above applies to you, there are a few quick things you can do to keep your tax bill low, even if Obama follows through on his promised tax increase. If you have unrealized capital gains and are considering selling an investment, this might be the time to do so. Currently, the capital gains tax rate is 15%. Obama plans to raise it to 20%. If you are thinking of selling, sell now and pay only the 15% tax. On the bright side, if you are a small-business owner, Obama plans to eliminate capital gains taxes for you.
If you find that you are paying capital gains taxes on a regular basis, consider changing around your investments. This is a great time to consider buying more index mutual funds in your taxable portfolio. The turnover of stocks in index funds is very low, which means you pay less capital gain taxes on an ongoing basis.
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