Find a Financial Advisor or Financial Planner to Help with Upcoming Tax Changes

Saint Louis, MO, April 14, 2010 --(PR.com)-- Investors are facing one of the most uncertain outlooks in recent history. Not only are the financial markets volatile, but the government rules and taxes have changed dramatically for this year and next. Investors should find a financial advisor to adjust their financial plan for the following situations.

Roth IRA conversions

New rules for 2010 allow investors to convert a traditional IRA to a Roth IRA. A traditional IRA is funded with pre-tax money, meaning it hasn’t been taxed yet, but will be when it’s withdrawn in retirement. A Roth IRA is funded with your post-tax income, but is potentially tax-free when withdrawn (unless the government sets income limits or changes the rules by the time you retire). The current government rules allow individuals to convert their regular IRA to a Roth IRA by paying the taxes on the conversion amount, but this has previously been limited to only a few people. In 2010 only, the government is allowing anyone to make this conversion. The calculations are complex, so investors should consult with a financial advisor to determine if a Roth conversion is right for them.

New Healthcare Legislation

The recently passed healthcare legislation increases costs on Americans in several ways. First, a new 3.8% Medicare tax is applied to rental income, royalties, dividends and capital gains. Second, a new 0.9% Medicare tax is levied on the self-employed and everyone above certain income levels. Third, business owners face new healthcare costs for providing government approved healthcare or they face fines and penalties.

Government Increasing Taxes on Income, Capital Gains and Dividends in 2011

Starting in 2011, the tax rates for many areas, including regular income, capital gains, dividends and estates are increasing. The top income tax rate rises to 40%, capital gains and dividends increase from 15% to 23.8%, and estate taxes rise from 0% to 55%. Investors should find a financial planner or financial advisor to help them determine their best approach for recognizing income this year and next to deal with these tax increases.

Estate Taxes Increase in 2011

Currently, the federal estate tax has dropped to zero for 2010, meaning individuals can leave assets to their heirs without the IRS taking a large portion of their estate. However, this is limited to one year. Starting in 2011, the estate tax returns, with a rate over 50%, meaning it is vitally important for everyone to consider what will happen to their family and their assets once they pass on.

How do you find the right financial advisor to help adjust your financial plan?

Unfortunately, the tax increases on income, gains, dividends, rents and estates which are listed above all take effect in less than a year. Combine this with a confusing outlook for future government rules and it is apparent that most investors should find a financial planner to help them prepare. ClaroConnect.com provides an unbiased search tool to find a local financial advisor who matches your specific needs. Investors can use the site for free to screen for advisors, read profiles on matching financial advisors and then contact the ones they want to talk to.

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