First, calculate the amount of income tax that they will pay without any planning. Remember, in addition to their salaries, with the $1 million invested at 5%, the couple will also have $50,000 of interest income, for a total of $300,000 of annual income.

Use different tax savings strategies: lowering or deferring income; taking advantage of lower tax rates when applicable; maximizing deductions when possible.

Calculate the tax savings from your plan over more than just one year, but assume the same tax rate in future years.

If a technique results in a deferral of income tax (rather than avoidance), explain how long the tax can be deferred.

Jour new financial planning clients are Howard and Wanda. They are in their early thirties and have two young children, Bob (age 3) and jenevieve (age 1). Wanda makes $125,000 per year and Howard makes $125,000 per year. Wanda just received $1 million in life insurance vhen her grandfather died. They have come to you for advice on how to invest the $1 million and minimize the amount of income tax that they have to pay. They want o save for retirement and for their children's college education. For purposes of this Project, assume that interest and dividends will be at \%\% per year and municipal bonds pay 4% per year. They pay State and Local Taxes at 10% per year ($25,000). They are willing to donate up o $10,000 per year to charity and can be flexible about the timing of the donations. They do not have any significant medical bills. They do hot currently own a home but would consider buying a home. Assume whatever other facts you want for the assignment. For example, they ould change from being employed to opening a business, but their income level must stay at $250,000