Perhaps you’ve been wondering how to reduce your income tax burden. Fortunately, you can – with tax reduction planning.
Tax planning can lead to substantial tax savings under the right circumstances. If you fall into any of the 6 categories below – you might be giving the IRS way more than their fair share of your money.
1. You own a business or are self-employed
Owning a business or receiving a 1099 comes with certain financial responsibilities – but it also paves the road to various tax breaks IF you know how to take advantage of them. Otherwise, you may be stuck with a very high tax bill year after year and wondering how others make it work.
2. You want to maximize your retirement contributions
If you are at the point in your life where saving for retirement is high on your to-do list, a tax planning strategist can help you optimize retirement structures. Perhaps your spouse does not work and is not contributing towards retirement – or you heard about backdoor Roth IRAs but are not sure how to set one up. It might be best to consult a professional. In addition, a 401K / Profit Sharing Plan or Cash Balance Plan can be wonderful incentives for your employees.
3. You are earning much more today than you earned a year or two ago
Your business has doubled. Or tripled. Or maybe you took on a new business partner and got a cash injection. Congratulations! These events trigger a higher tax burden, and you just hate seeing all that revenue and income going to the IRS. Fortunately, there are ways to lower your burden if you work with the right CPA firm.
4. You have had an IRS audit
Tax planning is not just about strategies – it’s also about compliance. You need to work with professionals who will not only tell you how to lower your taxes but will also make sure you do not raise any red flags with the IRS, and only claim deductions legally available to you.
5. You have income from various sources
Many business owners receive a W-2 in conjunction with a 1099, real-estate income, a K-1 or investment income. This complexity creates multiple tax planning opportunities.
6. You can think of better ways to spend your time than studying IRS regulations
Including a visit from the in-laws.
Interested in finding out just how beneficial tax planning can be? Schedule a no-strings consultation and assessment with a Tax Reduction Adviser at Ratio CPA. We work exclusively with growth-oriented small and medium sized businesses who want to stop overpaying in taxes.