50+ Lifestyles

2010 Resolution – Take Control of your tax risk

By Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

Annuities – without question will help us reduce the amount of federal and state income tax as well as the amount of social security tax. I
encourage you to take control of the taxation risk.

It’s tax season again! Time to prepare all those papers, forms and receipts for the tax person. How many of us enjoy this annual
challenge of getting all that tax stuff ready? And the real question – how many enjoy paying taxes? Silly question huh?

Now don’t get me wrong. We live in the greatest country in the world. Paying taxes is part of our duty as responsible citizens. Tax dollars are
needed by our government to provide for our welfare, defense and common good. However as a taxpayer, the amount of tax we pay is always an issue. A good income tax adviser – knowledgeable with tax laws is a huge benefit. I am not a tax advisor. I don’t prepare taxes nor do I give tax advice. Professionally I am an insurance agent and financial professional. Like you, I am also a taxpayer. I am aware of some tax provisions, and I pass these on to our clients and to our listeners on Saturday morning’s Safe Money WOC radio show. Listen to our talk radio show on 1420AM dial each Saturday at 10:30.

As you may know, as an insurance agent and financial professional, I advocate annuities and other insurance products for clients to protect our valued retirement money against the many risks we face in life and risks that are further enhanced in retirement. One of these risks is the taxation risk. Too many people tell me they are paying more in taxes during their retirement than they have ever paid before. Isn’t that sad? In retirement we cannot afford to have any reduction in income. Tax reduces income.

Annuities – both qualified and non-qualified – offer the opportunity to really save on the amount of tax we pay. Let’s look at some of these areas. Grab your last completed tax form 1040. If you have already completed 2009 income tax return the 1040 should be handy. If not pull out 2008 tax return– look at these lines on your form:

Line 8a,
Lines 9a & 9bLine 15a & 15b
Line 16a & 16b
Line 20a & 20B
Line 32
Line 40a
Line 58

These are the important ones folks. The dollar amounts on all these lines contribute to the big one – and that’s line 43 – the taxable income line. The smaller the number that goes on this line the less income tax we end up paying. The higher the number on line 43, the more tax we will pay. That’s where annuities – qualified and non-qualified – may help keep this line to a minimum.

Annuities – without question will help us reduce the amount of federal and state income tax as well as the amount of social security tax. I
encourage you to take control of the taxation risk.