Ed Sloot urges advisors to act before hammer tax strikes


Planets may align for advanced tax planning in the last third of 2021.

Ed Slott, president of Ed Slott and Co. A set of newly announced tax proposals, combined with the effects of recent changes to tax laws, have created an opportunity for consultants to help their clients adapt and demonstrate value to potential clients. Webinar for financial advisor yesterday.

“Let the media do some of your marketing work for you,” Sloot said. Tax proposals today, yesterday and the day before were on the front page of nearly every major newspaper in America. …we don’t know if any of these things will come to fruition. Often they don’t, but clients see them.”

Sloot warned that the most important recent tax proposal, arising from the Better Rebuilding Act for Democrats in Congress, is a proposal to halve the lifetime gift and estate tax credit.

Currently, that exemption is $11.7 million, and more than $23 million for married couples, thanks to the Tax Cuts and Jobs Act of 2017.

Slott, who said there are three tiers of tax-exempt gifts most people fail to take advantage of, whether that happens or not, there is an opportunity to trim some estates with gifts. Lifetime exemption.

The first is the $15,000 annual gift exclusion, which allows an individual to make non-taxable gifts of up to $15,000 per person annually, to as many people as they want.

The second tier, which Slott calls “one of the biggest loopholes in tax law,” allows unlimited gifting as long as those gifts are given for the purpose of paying tuition or medical bills, and are paid directly to the educational institution or healthcare institution.

“Level 3 is already going ahead and using the waiver while it is here at more than $11 million,” Slott said. “If you don’t use it, you will lose it, and if you close these waivers now they will not be refunded.”

Slott also discussed proposals that would make it difficult to get money from a traditional tax-deferred IRA and into a tax-exempt Roth IRA, and recommended that advisors help their clients get money from their traditional IRA and possibly into a Roth account or life insurance policy It could be out of the estate.

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