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Stas Politis, CPFA®
Stas Politis, CPFA®
Upward Wealth Group, LLC Employer-Sponsored Plan Advisor & Investment Representative
https://www.upwardwealthgroup.com (561) 345-3992

At Upward Wealth Group, we understand the critical role of employer-sponsored plans in talent retention and employee financial well-being. By reducing financial stress, these plans foster a healthier work environment and enhance productivity and performance. With our tailored approach, we ensure that your company's retirement plan is not just effective but also aligned with your organizational goals.

Our services cater to a diverse clientele, including self-employed professionals, entrepreneurs, business owners, and executives/trustees seeking to optimize their retirement savings. With decades of experience and a commitment to personalized solutions, we specialize in crafting employer-sponsored retirement plans that suit your specific requirements. Whether you prefer a straightforward, easy-to-administer plan or a more intricate one tailored to your unique circumstances, we've got you covered.

Given their substantial contribution to our retirement nest eggs, we recognize the significance of 401(k) plans in retirement planning. It's essential to synchronize all your savings and investments inside and outside employer-sponsored retirement plans to maximize their combined potential in achieving your retirement objectives. By harmonizing these elements, we can build a comprehensive portfolio that works synergistically toward securing your financial future.

Let's collaborate to design a retirement plan that meets regulatory requirements, empowers your employees, and positions your business for long-term success. Reach out to us today to embark on this journey toward financial security and prosperity.

How Income Taxes Work

Tax Read Time: 3 min

The Internal Revenue Service estimates that taxpayers and businesses spend about 8 billion hours a year complying with tax-filing requirements. To put this into perspective, if all this work were done by a single company, it would need about four million full-time employees and be one of the largest industries in the U.S.1

As complex as the details of taxes can be, the income tax process is fairly straightforward. However, the majority of Americans would rather not spend time with the process, which explains why more than half hire a tax professional to assist in their annual filing.2

Remember, this material is not intended as tax or legal advice. Please consult a professional with tax or legal experience for specific information regarding your individual situation.

Getting Started

The tax process starts with income, and generally, most income received is taxable. A taxpayer’s gross income includes income from work, investments, interest, pensions, as well as other sources. The income from all these sources is added together to arrive at the taxpayers’ gross income.

What’s not considered income? Gifts, inheritances, workers’ compensation benefits, welfare benefits, or cash rebates from a dealer or manufacturer.3

From gross income, adjustments are subtracted. These adjustments may include retirement plan contributions, half of self-employment, and other items.

The result is the adjusted gross income.

From adjusted gross income, deductions are subtracted. With deductions, taxpayers have two choices: the standard deduction or itemized deductions. The standard deduction amount varies based on filing status, as shown on this chart:

Chart Source: IRS.gov, 2023

Itemized deductions can include state and local taxes, charitable contributions, the interest on a home mortgage, and certain unreimbursed job expenses, among other things. Keep in mind that there are limits on the amount of state and local taxes that can be deducted.4

Once deductions have been subtracted, the result is taxable income. Taxable income leads to gross tax liability.

But it's not over yet.

Any tax credits are then subtracted from the gross tax liability. Taxpayers may receive credits for a variety of items, including energy-saving improvements.

The result is the taxpayer's net tax.

Understanding how the tax process works is one thing. Doing the work is quite another.

1. NTU.org, April 18, 2022
2. IRS.gov, 2023
3. The tax code allows an individual to gift up to $17,000 per person in 2023 without triggering any gift or estate taxes. An individual can give away up to $12,920,000 without owing any federal tax. Couples can leave up to $25,840,000 without owing any federal tax. Also, keep in mind that some states may have their own estate tax regulations. This material is not intended as tax or legal advice. Please consult a professional with tax or legal experience for specific information regarding your individual situation.
4. The mortgage interest deduction is the first $750,000 of the loan for a home and the state and local income taxes deduction is capped at $10,000.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

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