As viewers of our content and commentary over the years know, Wahlstrom & Associates is one of the nations leading experts in and advocates for structured legal fees. These secured annuity funded programs allow trial lawyers and other lawyers to carefully, securely and wisely move taxable income from a large case or a banner year, into future tax years so as to smooth out the tax hit and more carefully plan their cash flow needs.
In this weeks edition of Speaking of Settlements, Mark Wahlstrom looks at the impact of the 2013 income tax increases on both the state and federal level and the fact that many lawyers are now facing tax rates in excess of 50%. When coupled with the fact that most large verdicts and large fee awards also come with substantial litigation debt financing that needs to be repaid, it is possible that some lawyers can actually net close to zero after paying taxes and litigation loans and financing!
While in past years it was always the advice of tax lawyers and CPA's to take income in the current year as taxes go up, we are now faced with the reality that taxes HAVE gone up and there is a strong argument to be made for deferring income into future years and possibly lower tax rates or brackets. I can't stress this enough, no other profession has the option to safely and securely income average their current year revenue into future years and to not at least examine if this makes sense for your tax situation is beyond foolish! Call your CPA or tax professional, schedule an appointment and find out the key points of what your new marginal tax rates are, what is your anticipated 2013 income and call Wahlstrom & Associates to determine if a structured legal fee annuity is possible on some of your cases in 2013.
The only certainty at this point is that you WILL pay higher tax rates in 2013 but with careful planning and working with an experienced structured settlement planning professional you can design a plan that works to save you money, fund your retirement and get off the case financing treadmill!