Long Term Tax Planning

By Garry Bartecki | Equipment Today Is there never a “TAX TIME” in the US? Don’t think so. And I believe “TAX TIME” is going to increase dramatically. The PROBLEM being that the US continues to spend more than it takes in, which we all know does not work in any way, shape or form. And how do we fix this? By taking more money from you and your company. THERE IS NOT A CHANCE IN HELL THAT THIS WILL NOT HAPPEN, because in four years US Debt will be about $40 Trillion, carrying $1.2 Trillion of interest cost (at 3%) and $1.6 Trillion (at 4%). At the same time the Annual Debt to GDP ratio we are talking about exceeds 100%. The estimates for 2023 are $4,439 Trillion of tax revenues against outlays of $6,134 Trillion of spending, with the debt balance growing yearly without a game plan to reverse the situation. It will take both higher revenues and spending cuts to reduce the deficit, considering that a large portion of spending is fixed (Social security, Medicare, Health benefits and interest expense, which all together add up to approximately $4.0 Trillion of outlays. Not a pretty picture. No matter how you look at our situation revenues need to increase, and outlays reduced to lower the total debt. I have suggested on many occasions that management spend time with their tax folks to fully understand what their tax position was for the past year, how it looks for the current year, planning for the current year with enough time to execute “tax” programs and to see what is on the horizon for the following year. I hope you have been doing this. If you followed this suggestion you should have a pretty good feel for your tax position and the impact on that tax position should Congress take steps to increase all the forms of taxes you pay related to payroll, company taxable income and personal income. . We find ourselves currently working with the 2017 TAX CUT and JOBS ACT that will expire in 2025. So, to start with let’s assume this ACT will be repealed. As a reminder of what the TAX CUT act provided here is a brief list of the benefits. READ FULL ARTICLE >>