The Secure Act 2.0 was signed into law on December 29th, 2022. SECURE stands for "Setting Every Community Up for Retirement Enhancement". While the bill itself is not easy reading, it is important to understand the direct ways in which the legislation affects TWG clients.

Tax planning is one of the most misunderstood areas of financial planning. From the complexity of how income taxes, Social Security taxes, and various investment taxes are calculated, to the fact that the tax code changes in some capacity almost every year, it’s no wonder that people are confused when it comes to this subject.

On Friday afternoon, March 27, President Trump signed the $2 trillion “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) into law. You can read the full 880-page bill here.

People talk about taxes all the time. (Especially during times of tax reform in Congress.) Income tax, property tax, sales tax, payroll tax, excise tax, investment income surtax, Medicare tax…..the list goes on and on. The most widely discussed and most prevalent is the federal income tax. Important pieces of that tax code are the marginal income tax brackets and tax rates. So what is a Marginal Income Tax Rate?

The majority of these United States (32 of them) do not charge a state-level estate tax (or inheritance tax). Minnesota is currently one of 18 states that does levy an estate tax beyond the Federal estate taxes imposed upon citizens. The Republican majority MN legislature pushed for and attained higher estate tax limits in this year's state tax bill. Governor Dayton reluctantly signed the tax bill into legislation at the end of May.

Here at The Wealth Group, we have a number of retired clients that maintain residency in warm-weather states with lower income tax burdens than Minnesota. Florida is by far the most common state to which our Minnesota clients transplant, but we also see clients establish residency in places like Texas, Arizona, Colorado, and Tennessee. For any of our clients considering a change in residency (or domicile), our first piece of advice to them is not to have tax considerations be the primary driver of the decision-making process. In other words, if your children and grandchildren all live in Minnesota, you don't mind the cold all that much, and life in Minnesota is generally quite suitable to you, we would tell you not to uproot yourself for 6+ months a year just to save money on taxes.

Quiz question: when did the US Government begin taxing individual American citizens on their earned income? Answer: just over 100 years ago, with the passage of the 16th Amendment to the Constitution in 1913. The 1913 tax rates started at 1% and topped out at 7%. That first tax bracket of 1% ran all the way up to the first $463,000 of income (in today's dollars). The top bracket of 7% did not kick in until you hit $11,500,000 of income (in today's dollars). Yes, you read those numbers correctly. And no, this is not a joke.