Tax Planning For Individuals
Is tax planning worth it?
Taxes are one of the most significant expenditures for many individuals and affect every area of their finances. However, tax planning can reduce this burden. You should be honest in all your tax dealings, but you shouldn’t pay more than what is expected by law.
We will apply effective tax planning strategies to help you reduce your tax liability as much as possible. You will save a considerable amount of money for other goals such as; children’s education, insurance, retirement savings, among others.
Our team makes this possible by comparing the benefits of various tax saving schemes while considering your social liabilities, personal preference, age and tax slabs.
What does tax planning do?
- Maximizes and accelerates deductions
- Minimize taxable income by spreading it among several members of your family
- Takes advantage of tax-efficient investment
- Eliminates future taxes
- Takes advantage of tax credit
Tax Planning For Business
Is tax planning worth it?
Tax planning for business involves formulating and implementing strategies that reduce the amount of taxes paid to the IRS for a given period. Minimizing tax liability will provide more money for growth, investment and expenses for your business.
We follow two major tax planning rules. First, your business shouldn’t incur more expenses while trying to qualify for a tax deduction. Purchasing equipment before the year ends is a perfect tax planning strategy.
However, purchasing unnecessary stuff only works against your business finances. Second, when possible, your business should defer taxes. We implement tax planning strategies to help your business achieve its financial and business goals.
What does tax planning do?
- Reduces tax liability
Our team can reduce your business’ tax liability significantly through planning and running your business operations as per the state laws.
- Zero litigation
Through tax planning, we will help you pay the least amount of tax for a certain period with no chances of a lawsuit. Remember, IRA aims at collecting the highest amount of tax; in this case, you need a tax professional to guide you through the process.
- Profitable investment
Tax planning channels taxable income to productive investments. Our tax professionals aim at utilizing your business resources optimally for profitable causes.
Of all the decisions you make before starting your business, the entity you select is one of the most important. This decision determines the amount of paperwork your business handles and the taxes you pay to the IRS. The most common business entities include sole proprietorship, C Corporation, corporation and partnership.
A sole proprietorship is a simple entity that allows you to have total control of your business. It is not considered as a separate business entity. This implies that your business liabilities and assets are not distinct from personal liabilities and assets. Do you have a business idea that you want to test? If so, the sole proprietorship entity is a perfect choice.
A partnership is a legal entity for two or more individuals that want to start a business together. Partnerships can either be a limited liability partnership or limited partnership. Under a limited partnership, one partner has unlimited liability while the other partners have limited liability. Every partner has limited liability under limited liability partnerships.
Corporations are legal entities that are taxed, held legally liable and make profit. Forming a corporation is a bit more expensive than other business entities. Unlike partnerships and sole proprietorships, the IRS requires corporations to pay income tax on profits earned. A Corporation has an independent life and can run smoothly even after one or two members sell their shares or leaves the company.
Understanding your quarterly taxes is vital in running your small business successfully. Making quarterly taxes payments allows you to spread your tax liability over 12 months and avoid high debts during tax time.
Every self-employed individual must pay quarterly taxes. Self-employed individuals include an independent contractor, a member of a partnership that runs a business, or a sole proprietor. Quarterly taxes include federal income taxes withheld from employees, Security, and Medicare.
If your business has employees, the IRS expects you to withhold payroll taxes from employees’ salary and make payments on their behalf. Payroll taxes include social security, Medicare and Federal income.
We will help you determine the exact amount you should withhold from your employees. Like most business owners, you might not understand how payroll works and what happens if you don’t pay. Our tax professionals will help you run payroll and manage your business better.
Opportunities to save
With the right tax planning strategies, you get to save more money which you can channel to other areas such as:
- Contribute more to your health savings account
- Max out your children’s education fund account
- Include all deductions or potential tax credits
- Contribute more to your retirement plan
- Donate appreciated securities
Tax preparation involves preparing, documenting and filing your tax returns. The procedure includes signing your tax returns forms and checking whether you owe the IRS or deserve a tax refund. We will help you prepare and file your taxes accurately and in time.
Benefits of tax preparation
- Eliminate the tax burden
Most tax returns are complex due to complicated and changing tax rules. You have to fill in different forms when filing your tax returns. Each document requires unique information from your business or individual records.
Completing a complicated tax return is not only time consuming but also increases the risk of an error. Our tax professionals will help you ease this burden.
- Adequate tax advice
Like most people, you might not understand how the IRS operates and the complex tax rules. Our team will give appropriate advice on various tax issues. For instance, we can help you identify the credits or deductions you or your businesses qualify for.
- Minimal to zero errors
Computation errors and simple math errors are common tax errors that can delay a refund, result in fines, tax liability and interests. Although our team is not perfect, we register minimal to zero errors when handling tax preparation tasks.
- Avoid legal consequences
Our team will ensure that your tax return is free from errors and that everything stated is accurate before you sign. In case you are audited by the IRS, you will not be prone to adverse legal consequences.
Common tactics to save money
- Invest in long term capital gains
Investing in real estate, bonds and stocks is a perfect tax-saving idea for long term capital gains. If you own financial assets for more than one year and later sell them at a profit, you will pay less capital gain tax than an individual who held the asset for less than one year.
- Take advantage of tax-free income
Various types of income aren’t taxed. You can save a considerable amount of money if you earn maximum tax-free income. There’re different ways to make this possible, for instance, selling your home, investing in municipal bonds, or saving for your kid’s education.
- Maximize tax deductions
The more the deductions, the less tax you will pay. Deduct all your business expenses such as home office, operating costs, office, inventory, and travel, among others. With the help of our team, you can also qualify for a 20% pass-through tax deduction.
- Transfer income to others
In case you are in a high tax bracket, we will help you shift your income to an individual in a lower tax bracket and save a significant amount of money.
- Consider tax credits
By obtaining a tax credit, you will not pay any taxes at all. For instance tax credits for making a home improvement or buying a high quality car. Others include education and child care tax credits.
Business tax preparation
Your business structure and location determines your business tax return. For example, if you have hired several individuals, tax laws dictate that you pay employees and withhold taxes. Wondering if you have to file quarterly or annual tax returns? Read along for more insights.
Quarterly vs. annual
If you have hired one or more people, we will help you file quarterly returns by completing Form 941. These taxes include taxes withheld from your employees, Medicare and Security. You will use Form 720 if your business pays excise taxes.
You will file your annual tax returns if your business has no employees. When filling, you will record your business annual losses and profits in the form Schedule 1040C. Both annual and quarterly tax obligations are unique in every State. We will help you do research and handle your business tax preparation needs on time.
Helping with IRS problems, we represent you
It is normal to encounter IRS problems within the course of your business life. Some of the IRS tax problems include not paying taxes, not filing taxes within the period given, paying more tax than you owe, errors in your tax returns forms and so on.
If IRS contacts you, respond as soon as possible. Our team will deal with the IRS on your behalf. We have handled numerous tax problems under different circumstances. Our tax professionals will help you choose a tax resolution strategy that will eliminate the problem.
What is tax resolution?
Tax resolution involves developing and implementing solutions to resolve IRS tax problems. Optimal tax resolutions will not only eliminate the problem permanently but also reduce the tax liability to a minimum amount allowed by tax law. If you are struggling with back taxes, penalties and interests don’t panic. We will offer the best tax resolution services and walk with you from the beginning to the end.
Small business tax resolution
It’s normal to worry after receiving a notice from the IRS. You probably don’t have the knowledge or experience to get the best tax resolution. With our support, you can reduce or even eliminate tax interests or penalties. We will assess your problem and decide on the best action to take. Some tax resolution strategies include;
List of options
- Tax compromise
- Payment plans
- Innocent spouse relief
Federal vs. State Tax Filing
How it impacts taxes
In the United States, taxes are imposed by state, federal and local government. State and federal income taxes are alike since they apply a specific percentage rate to taxable income. The rates, type of taxable income, tax credits and deductions allowed can however differ.
State taxes are collected and used by the state government, while the federal government collects federal taxes. Tax laws are different across jurisdictions. Our team will help you interpret and handle your state and federal tax obligations.
How a CPA can help
- Organization of taxes
If you have unpaid taxes, we will help you create a budget and negotiate for a payment plan with the IRS. We will also advise you on restructuring, investments, merges, inventory or sales.
- Saves money
Our team knows how you can maximize deductions and help you save some money. We will handle life changes, investments, foreign accounts, real estate and business accounts. Our tax professionals can easily detect a red flag that can prompt an audit.
- Ease the burden
Filing your federal and state taxes to completion is not a simple task. We will handle your tax obligations as you focus on growing your business.
We will help you determine the amount of money to withhold from employees’ salaries. Our team will create a customized system that makes it easy to collect, file and pay payroll taxes.
Tax planning and preparation are essential if you want to avoid tax liability. Most people without a background in accounting don’t have the know-how to handle their tax obligations. We can help you handle personal or business tax and accounting issues.
We have experience in taxes and accounting and provide our services to industries such as technology, oil and gas, real estate, and non-profits, among others. We offer free unlimited consultations and never charge for phone calls or emails. We are waiting to hear from you soon!