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You Have Options

Beware of
What if you could use dollars that already had to be
taxed today to create tax-free income in the future?
Personal Financial
What if there was a strategy to get tax-deferred ac- Hazards
cumulation no matter what your level of income? Part 2a
What if your retirement resources didn’t all have to Failure to Take Advantage of Tax Efficiencies
be taxed before use during retirement? Available Under the Law: Are You Building Any
Sources of Tax-Free Future Income?
What if you could improve the performance of low
yielding cash while also protecting your family’s future?
What if your strategy eventually returned more
Income Taxation
than you put in, without tax, while leaving your family a The highly intricate income tax system is very effi-
legacy? cient at taxing almost every type of income stream in
What if there was a way to create the dollars needed some way. Some types of income are taxed very heavily
in the future for pennies on the dollar today? every year while others are taxed at lower rates. Without
careful planning, sources of tax-free future income
Let’s Talk might never be created.
There are several powerful strategies that can help Do you have multiple income streams? Which taxes
you accomplish these, and many other, personal finan- apply to them? Payroll taxes (Social Security, Medicare),
cial goals. Let’s sit down and talk and you can decide if self-employment tax, ordinary income tax, capital gains
any of these strategies might be of interest to you. tax, net investment income tax, state income tax, or mu-
nicipal taxes? Do you have any income that is growing
Ardal Powell, MA, PhD
without taxation, any tax-free income? When was the
New York Life/NYLife Securities last time your CPA discussed creating sources of tax-
460 Temple Hill Rd free income in future years, or have they only focused on
New Windsor, NY 12553
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New York Life Insurance Company, its agents and employees may not provide legal, tax or accounting
advice. Consult your own professional advisors before implementing any planning strategies. © 2018
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Let’s Look at the Numbers
reducing this year’s income tax burden? Do you have
the time to find the tax laws that allow for tax-free fu- Let’s look at how different types of income may be
ture income? Do you know how to apply them? Do you taxed and whether Karen or John have any tax-
qualify to use those strategies? advantages.
Many people don’t know how many different income  
tax laws they are subject to each year so they don’t act
to create tax-advantaged or tax-free future income.
What income tax laws apply to your income sources?
Let’s look at a hypothetical example.

Are your income streams subject to multiple

types of taxation without any that are

Karen is a renowned obstetrician and a partner in the

ob/gyn group at Metroville Regional Medical Center. She
earns $280,000/year. Karen owns a rental property that
produces $20,000/year in rental income. She earns a All of their income is subject to multiple taxes! A
couple thousand dollars per year in interest on her check- large portion is earned for the government. Think of
ing and savings. Karen’s husband, John, is a successful re- how hard it can be to reach financial goals with such
gional sales representative for a national construction high tax friction!
supply firm. John’s annual wages are over $180,000. Also, remember that many dollars growing for re-
With household income of almost $500,000, Karen tirement have to be taxed (investment gains are taxed
and John are subject to a lot of income tax liability! upon sale or account distribution) and given to the gov-
ernment before you can use what is left over for retire-
ment living and goals.