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Are tax rates about to go up?

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Published: Apr. 13, 2021 at 12:47 PM EDT
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LEXINGTON, Ky. (WKYT) - As we are all filing our taxes, you may be wondering what taxes will look like in the future. Financial experts say they are likely to rise. Independent financial advisor Josh Smith of Strategic Wealth Designers joined us on the newscast to talk taxes. Tax rates may rise in the future.

“I would expect tax rates to rise,” Smith says. “Historically, tax rates are actually low. Based on the amount of government spending we have seen - we can expect them to rise. This could happen in a variety of ways. This may be through higher individual tax rates, corporate tax rates, or capital gains rates.”

Short-term pain can create long-term gain for your retirement. By utilizing a Roth IRA or Roth 401(k) as a savings vehicle, you fund the account with after-tax dollars. This means that when you pull the money out later on, you don’t have to pay taxes when rates will potentially be higher.

“Taxes are due May 17th this year,” Smith says. “Check out changes for this year, like the Recovery Rebate Credit. This allows taxpayers who didn’t claim earlier stimulus they may have missed before. Individuals who already received the full amount of stimulus cannot receive the Recovery Rebate Credit.”

The IRS is encouraging filing electronically, rather than via paper forms. To see additional stories surrounding business and economic news for the Lexington area, visit https://www.WKYT.com/MoneyMatters/ and if you have a question for Josh send an email to info@swdgroup.com.

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