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Common Questions About Taxes and Investments in Mesa

— June 8, 2023

Real property is usually considered one of the safest and best long term investments for any person.

Mesa, AZ – Most people start to invest for retirement or other future goals at some point during their career. However, the government still wants people to pay taxes on certain investments, especially when the money comes out of an investment account as income. This can be one of the most confusing areas for people when they file taxes, as rules related to investment accounts tend to be much different than paying basic federal income taxes. 

Lawyers should always be consulted for more details about any of these matters, as they can provide specific advice and help individuals and businesses remain compliant with tax laws and regulations. 

What is a capital gains tax?

Most people who sell a piece of property such as a home or any investments such as stocks will need to pay capital gains tax. This is essentially a way of the government collecting money on the appreciation of the asset during the time it was owned. Therefore, those who have a home or investments that have increased in value greatly over time should expect to put some of their profits aside for taxes in many cases. Mesa tax lawyers can explain whether the item will be subject to the capital gains tax, or the specific rate and amount that will apply. 

How is investment property taxed?

Real property is usually considered one of the safest and best long term investments for any person. Arizona tax lawyers always get questions about real estate and taxes because many people own some kind of real property which generates income that is subject to taxes. As a general rule, expenses related to maintaining an investment property can be deducted like other business expenses. Things like depreciation of the building or house over time can be considered, and this can affect the tax burden as well.

Lawyer having coffee while at laptop; image by Mateus Campos Felipe, via
Image by Mateus Campos Felipe, via

What are the advantages of a 401(k) or an IRA to save for retirement?

These investment options are ways that people can save for their future or their retirement while temporarily avoiding tax liability. The taxes are technically deferred on a 401(k) until the person actually withdraws the money from the account.  A traditional IRA is similar in the sense that contributions to the account can be deducted from taxes. IRA earnings also avoid any tax consequences until the person is retired. However, any individual who has an IRA should check to see whether the rules will change slightly if they have a Roth IRA, simple IRA, or traditional IRA. Both Tax lawyers and estate planning lawyers provide advice about what kind of investment may be better depending on their specific situation. 

Experienced lawyers are available helps people find a lawyer who can solve their problems in any city or state. Those who want a referral to a licensed attorney can call 800-672-3103 for assistance. 

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