Tax Planning in Chesterfield, MO

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Tax PlanningReduce Your Tax Liability With Correct Capital's Financial Advisors in Chesterfield, MO

Tax Planning in Chesterfield, MO. Tax liability is how much you owe in taxes to local, state, and federal entities. While Uncle Sam will always collect some portion of your earnings or profits, The IRS allows for several ways to reduce how much money you have to pay. Tax planning is also key to planning the retirement of your dreams. At Correct Capital, we work with local Chesterfield, MO individuals, families, and businesses to find creative and time-tested strategies for reducing their tax burden. Speak to Correct Capital's tax planners and fiduciary advisors today at 877-930-4015, contact us through our website, or read on to discover how diligent tax planning can keep more money in your account both now and in the future.


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Tax Planning for Chesterfield, MO Individuals and Families

Smart tax planning is essential for individuals and families who want to increase their retirement savings and afford them more money for both now and the near future. Ways to reduce how much you owe when tax planning in Chesterfield, MO include:

  • Standard Deduction vs. Itemizing —

    The standard deduction is a no-questions-asked amount that ensures all tax payers have at least some income that is not taxable. In 2022 and 2023, that flat-rate is:

    2022

    • $12,950 for single filers
    • $25,900 for married, filing jointly
    • $12,950 for married, filing separately
    • $19,400 for head of household

    2023

    • $13,850 for single filers
    • $27, 700 for married, filing jointly
    • $13,850 for married, filing separately
    • $20,800 for head of household

    If more income that shouldn't be taxed than the above, you can count up each deduction you're eligible for one by one. The disadvantage is that doing your taxes takes longer, and you have to prove each deduction.

  • Review How You Are Saving For Retirement —

    Roth IRAs and Traditional IRAs differ in how your savings are taxed. Money you put into a traditional IRA can be deducted from your taxable income, and you pay taxes on it when you withdraw it. Money put into a Roth IRA are not deductible, but the money grows tax free. Your unique situation will determine what may be better for you for your tax planning. For example, if you anticipate have more tax liability in the future, you can transfer money from a traditional IRA to a Roth IRA to pay taxes on the conversation, while allowing the money to grow tax-free.

    If you contribute to a 401(k) plan through your job, you can choose to defer income from your paycheck and have it placed directly in your 401(k). You can place up to $20,500 to a 401(k) in 2022, plus an extra $6,500 if you're 50 or older. For 2023, you can deposit up to $22,500 or $30,000.

    If you're have freelance income, you can open up an individual retirement plan, such as a One-Participant 401(k) Plan, and you can deduct your contributions there.

  • Tax-Loss Harvesting

    If you sell stocks, bonds, or options at a loss, you can offset the amount of capital gains tax you would have to pay if other securities sold at a profit. This strategy is utilized more with short-term capital gains, as the tax rate is typically higher than long-term. The maximum deductible amount is $3,000 per year, but additional losses can be carried over into future years.

  • Consider Paying Next Year's Bills Now —

    If you have medical expenses your insurance didn't cover, you can write off those that exceed 7.5% of your adjusted gross income. You can also make deductions this year for property taxes if you pay early (and if your municipality allows it), pay for a child's tuition or for career-boosting classes for you early for a Lifetime Learning Credit.

  • If Married, Filing Jointly or Separately —

    The IRS says that roughly 95% of married couples file jointly. It helps spouses qualify for a higher standard deduction, as well as a variety of tax credits not available to single filers. However, if both spouses earn considerable incomes, filing separately may reduce their combined tax liability. If one spouse has a lot of medical expenses, it may make sense to file separately to qualify for the 7.5% limit for medical deductions.

  • Donate to Charity —

    You can deduct up to 60% of your adjusted gross income via charitable donations. Accepted charities include:

    • Non-profit organizations that are religious, scientific, educational, or dedicated to the prevention of cruelty to animals and children
    • Veterans' organizations
    • A domestic fraternal organization operating under the "lodge system," under the condition that the funds are used for charity
    • Cemetery companies
    • Any government entities, under the condition that the funds are for public use
    • Often, a Canadian, Mexican, or Israeli organization, under the condition that the organization meets the criteria for a charity under United States law

    If you deposit money in a Donor-Advised Fund, you can get a tax reduction by putting money into it now, while still being able to wait to decide how the funds will get distributed down the road.

    If you are at least 70½ years old, you can make what's referred to as a qualified charitable distribution by transferring up to $100,000 a year from a traditional IRA directly to a non-profit organization tax-free. If you are 72 or older, that transfer counts as your required minimum distribution.

When you consult with an experienced financial adviser for your tax planning in Chesterfield, MO|With the help a financial adviser in Chesterfield, MO, you can not only pay less in taxes this year, but understand how to get further benefits once you retire.



Tax Planning for Chesterfield, MO Businesses

Business owners can use smart tax planning to keep more money in their business. Some things to consider when tax planning for your Chesterfield, MO business include:

  • Evaluate How Your Business Is Structured —

    There are many things to consider when deciding how to structure or restructure your business. Structuring your business as an LLC, sole proprietorship, partnership, or S or C corporation will affect how much you pay in taxes both as a business and individually.

  • Evaluate the Retirement Plans You Offer Employees —

    Offering retirement plans not only attracts and retains talent, but it also allows you to deduct contributions. The "SECURE" Act of 2019 changed rules for creating and maintaining retirement plans for both small and large employers, so it's recommended to consult a financial advisor in Chesterfield, MO about how those changes affect your tax planning.

    a good idea if you and your employees are both higher-earning. While an employer must contribute several hundred thousand dollars per year, the tax saving can be significant.

  • Consider Fringe Benefits For Your Employees —

    Increasing your employees' wages can lead to higher taxes for you. Talk to your employees about whether or not they would be open to fringe benefits rather than just giving them more money. Common fringe benefits include medical insurance, group life insurance, childcare assistance, transportation reimbursement, meals, more paid time off, or continuing education reimbursement.

    You can also set up accountable plans to pay employees back for certain expenses like travel, meals, or entertainment without counting the reimbursement as income.

  • Put Your Family to Work —

    If you get your children on the payroll, they do not have to pay taxes on their first $12,000 in income, and you can help them begin to save in a vehicle like a ROTH IRA. If your spouse works in the business, you can double your retirement plan contributions.

  • Buy a Company Vehicle —

    Depending on the nature of your business, you and your employees may be able to use a company vehicle and deduct the transportation costs. You can make the deduction in two ways:

    • Use the standard mileage rate to deduct 58.5 cents per mile (for January to June in 2022) or 62.5 cents per mile (for July to December in 2022); or
    • Keep a record of your actual expenses, like maintenance, registration fees, and gas, and determine whether those allow you to deduct more than the standard mileage rate would have
  • Look into Tax Loss Carryforward —

    If you're not able to make certain deductions this year, you may be able to carry them over into another year. These can include a home office deduction, net operating losses, business credits, and capital losses.

Tax laws for businesses are always in flux. One advantage of working with an experienced Chesterfield, MO tax planner is that they will work with you and your tax professional to identify if there are ways to strengthen your long-term financial success.

Other services we offer in Chesterfield, MO include:

Tax Planning Chesterfield, MO | Retirement Planners | Financial Advisor Near Me

Tax Planning in Chesterfield, MO | Correct Capital Wealth Management

At Correct Capital, our Chesterfield, MO tax planners know how important the financial health of your family or business is, both now and in the future. That is why we hold ourselves to the fiduciary standard: we are legally and ethically bound to act in your best interest. With tax law always changing, it's important to put a team around you that will help, like your Chesterfield, MO financial advisor, tax professional, and attorney. For help with tax planning, asset management, or any other financial services in Chesterfield, MO, call Correct Capital today at 877-930-4015 or contact us online.


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