Tax Planning in Grand Prairie, TX

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Tax PlanningReduce Your Tax Liability With Correct Capital's Financial Advisors in St. Louis

Tax Planning in Grand Prairie, TX. Tax liability refers to the amount you owe in taxes to local, state, and federal authorities. While it’s inevitable that a part of your earnings or profits goes to taxes, there are numerous legal strategies to lessen your tax burden. Tax planning is also a key factor in successful retirement planning. At Correct Capital, we don’t give tax advice; however, we partner with local Grand Prairie, TX individuals, families, and businesses to find inventive and reliable ways to lower their tax obligations. One approach we may recommend is maximizing deductible employee or employer retirement contributions to reduce tax expenses. Reach out to Correct Capital's tax planners and fiduciary advisors today at 877-930-4015, connect with us online, or keep reading to learn how proactive tax planning can benefit you.



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Tax Planning for Grand Prairie, TX Individuals and Families

Effective tax strategies can help individuals and families grow their retirement savings and offer them more money for both the present and the future. Consider these elements when tax planning in Grand Prairie, TX:

  • Standard Deduction vs. Itemizing —

    The standard deduction is a fixed amount that reduces your taxable income without needing specific proof of deductions. In 2024, the standard deductions are:

    • $14,600 for single filers
    • $29,200 for married, filing jointly
    • $14,660 for married, filing separately
    • $21,900 for head of household

    When your deductible income is more than the standard deduction, itemizing each eligible deduction may be advantageous. The trade-off is that itemizing takes more time, as you need to provide evidence for each deduction. A financial planner in Grand Prairie, TX can work with you to decide whether using the standard deduction or itemizing is more beneficial.

  • Review Your Retirement Accounts —

    Roth IRAs and Traditional IRAs both present unique tax benefits. With a traditional IRA, your contributions may be deductible, and you defer taxes until you take distributions. Unlike traditional IRAs, Roth IRA contributions are non-deductible, but your funds grow without future taxes. Which account benefits you most will depend on your specific tax planning needs. One potential strategy is a Roth conversion, which moves funds from a traditional to a Roth IRA, letting you pay taxes now and enjoy tax-free growth later.

    If you have a 401(k) plan with your employer, you can set aside income from your paycheck, placing it straight into your 401(k). For 2024, you can contribute up to $23,000 to a 401(k), plus an extra $7,500 if you are over age 50.

    For self-employed individuals or those with freelance income, individual retirement plans are also available. Options include a Simplified Employee Pension (SEP) IRA or a One-Participant 401(k) Plan, with contributions that can be deducted.

  • Tax-Loss Harvesting

    By selling securities at a loss, you can offset capital gains taxes owed on gains from other investments. This approach is particularly beneficial for short-term capital gains, which are often taxed at higher rates than long-term gains. You can deduct up to $3,000 in capital losses each year, with any remaining losses rolled over into future tax years.

  • Consider Paying Next Year's Bills Now —

    For unreimbursed medical expenses, you can deduct costs that surpass 7.5% of your adjusted gross income. You can also make early payments for property taxes (if your local rules allow it), a child’s tuition, or professional courses, potentially benefiting from the Lifetime Learning Credit.

  • If Married, Filing Jointly or Separately —

    Roughly 95% of married individuals file jointly, as this is required for some tax benefits and credits. However, if one spouse is a higher earner, filing separately might place them in a lower tax bracket. In situations where one spouse has substantial medical expenses, separate filing can help reach the medical deduction threshold.

  • Make Charitable Donations —

    By donating to qualifying organizations, you may deduct up to 60% of your adjusted gross income. According to IRS Publication 526, qualifying organizations include:

    • Non-profit organizations focused on religion, science, education, or preventing cruelty to animals and children
    • Veterans' organizations
    • Domestic fraternal organizations operating under a "lodge system" if funds go to charity
    • Cemetery companies or organizations
    • Government agencies at any level within the U.S. when funds are for public benefit
    • In some cases, Canadian, Mexican, or Israeli organizations if they qualify as U.S.-equivalent charities

    *According to IRS Publication 526 (2023), Charitable Contributions

    If you start a Donor-Advised Fund, you’re able to contribute a significant amount right away for an instant tax deduction and suggest distributions over the coming years.

    Once you reach age 70½, you’re eligible to make a qualified charitable distribution by transferring up to $105,000 annually from your IRA directly to a charity without tax consequences. Once you’re 73 or above, the donation can also be applied as your required minimum distribution, potentially lowering both future distribution requirements and tax obligations.

By working with an experienced financial adviser for tax planning in Grand Prairie, TX, you can reduce your tax liability this year and create a plan for managing taxes through retirement. Correct Capital is here to help you keep more of your money today and establish a financially secure future.

Common Tax Planning Mistakes for Grand Prairie, TX Individuals and Families

Good tax planning plays an essential role in ensuring your family’s financial well-being. Unfortunately, errors in tax planning often cause people to owe more or miss savings opportunities. Here are a few frequent tax planning mistakes and ways Correct Capital can assist in preventing them:

  • Not Maximizing Retirement Contributions —

    Failing to contribute the maximum allowable amounts to tax-advantaged retirement accounts, such as Traditional IRAs, Roth IRAs, or 401(k) plans, can lead to missed tax deductions and reduced growth potential over time.

    How Correct Capital Helps: Our team assesses your finances to confirm you’re maximizing contributions, minimizing your tax burden while enhancing your retirement savings.

  • Overlooking Available Tax Credits and Deductions —

    Valuable tax credits and deductions—like the Earned Income Tax Credit, Child Tax Credit, and deductions for medical and educational expenses—are often overlooked by individuals.

    How Correct Capital Helps: Our advisors may review your tax return to see if you’ve claimed all available credits and deductions, aiming to maximize your refund (if eligible) or minimize any amount owed.

  • Poor Record-Keeping —

    A lack of organized financial records may result in missed deductions and complications at tax filing time, and without the right documents, you may have trouble supporting claims if audited.

    How Correct Capital Helps: Our team helps you establish organized record-keeping systems and locate required documents, making sure everything is available for tax filing or in case of an audit.

  • Ignoring Tax-Efficient Investment Strategies —

    When investment decisions are made without considering tax consequences, returns may be reduced. This often happens when asset location strategies are ignored or tax losses are not harvested.

    How Correct Capital Helps: We help you implement tax-efficient investment strategies, including selecting the best vehicles and methods to lower taxes on dividends, interest, and gains.

  • Failing to Plan for Life Changes —

    Major life events like marriage, divorce, having a child, or buying a home can have a substantial impact on your tax situation. Neglecting to adjust for these changes can lead to unexpected tax liabilities.

    How Correct Capital Helps: Our team works with you to adapt your tax planning to significant life events, so you maximize applicable credits and deductions and meet tax requirements.

  • Underestimating Estimated Tax Payments —

    For income not subject to withholding—like freelance or investment earnings—you may be required to make estimated tax payments. Without making these payments, you could face fines and interest charges.

    How Correct Capital Helps: We help you prepare your cash flow to cover estimated tax payments, avoiding fines and added interest.

  • Not Utilizing Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)

    HSAs and FSAs allow for tax-efficient healthcare spending, but they’re often underutilized by eligible individuals.

    How Correct Capital Helps: Our advisors explain the advantages of HSAs and FSAs and determine if they’re right for you, helping you set aside pre-tax funds for medical costs to reduce taxes.

  • Overlooking Education Savings Plans —

    Failing to consider 529 college savings plans may mean missing valuable tax benefits for education savings.

    How Correct Capital Helps: We help you open education savings accounts, allowing for tax-deferred growth and possible state tax benefits.

  • Not Reviewing Withholding Allowances

    Incorrect tax withholding—either too much or too little—may result in a big refund or an unexpected tax bill.

    How Correct Capital Helps: We assist in adjusting your W-4 form to ensure correct withholding, helping improve cash flow and avoid surprises when filing taxes.

  • Missing Opportunities for Charitable Contributions —

    Failing to document or strategize charitable donations can mean lost deductions.

    How Correct Capital Helps: We assist with planning your charitable giving to maximize tax benefits, including helping with Qualified Charitable Distributions (QCDs) if you qualify.

Tax Planning for Grand Prairie, TX Business Owners

Business owners in Grand Prairie, TX can use strategic tax planning to keep more revenue within their business. Keep the following in mind for effective tax planning for your Grand Prairie, TX business:

  • Review the Structure of Your Business —

    The structure of your business impacts tax planning and should be carefully considered. Whether you choose an LLC, sole proprietorship, partnership, or S or C corporation, your tax obligations for both the business and yourself will be impacted.

  • Review the Retirement Plans You Offer Employees —

    Setting up retirement plans like 401(k)s, 403(b)s, and similar options can help reduce tax obligations. The 2019 "SECURE" Act introduced new retirement plan rules, so consulting a financial advisor about their tax implications may be beneficial.

    If you’re a high-earning business owner with high-income employees, a Cash Balance Pension Plan could be advantageous, though it requires large contributions.

  • Have Your Family Work For The Business —

    Hiring family members can bring tax benefits. Children can work for you tax-free up to $14,600, and they can start saving in a ROTH IRA. If your spouse works in the business, you may also double your retirement contributions.

  • Use a Company Vehicle —

    Depending on the nature of your Grand Prairie, TX business, you and your employees may be able to use a company vehicle and deduct the transportation costs. You can take this deduction using one of two methods:

    • Deduct 67 cents per mile using the standard mileage rate, which applies to gas and electric vehicles alike; or
    • Keep a record of actual expenses, including maintenance, registration, and gas, to see if this results in a larger deduction than the standard mileage rate.
  • Consider Fringe Benefits For Your Employees —

    Boosting employee wages often results in higher employment taxes. Consider whether employees would prefer fringe benefits instead of direct wage increases. Possible fringe benefits that may reduce tax liabilities are health insurance, group life insurance, childcare assistance, transport reimbursements, meals, family or medical leave, and continuing education reimbursement.

    Accountable plans allow for reimbursing employees for specific expenses, like travel, meals, or entertainment, without these amounts counting as income.

  • Look into Carryover Deductions —

    If certain deductions aren’t usable this year, you may be able to apply them in a different tax year. Examples of carryover deductions include home office expenses, net operating losses, business credits, and capital losses.

Tax regulations for businesses are always in flux. Partnering with a professional tax planner in Grand Prairie, TX means they work with you and your tax expert to identify strategies for enhancing long-term financial outcomes.

Common Tax Planning Mistakes for Grand Prairie, TX Businesses

Effective tax planning allows businesses of all sizes to reduce tax liabilities and increase profitability. Yet, numerous businesses make frequent tax errors that result in increased tax bills, overlooked deductions, and potential penalties. Below are some of the most common tax planning errors businesses make and how Correct Capital can help you avoid them.

  • Not Paying Estimated Quarterly Taxes —

    Failing to pay or underpaying quarterly estimated taxes can result in IRS penalties and interest charges. This issue frequently affects small businesses, freelancers, and companies with irregular income.

    How Correct Capital Helps: We provide support in calculating and scheduling estimated taxes so you meet IRS requirements and avoid penalties.

  • Neglecting Retirement Plan Contributions for Owners and Employees —

    Many companies miss the opportunity to use retirement contributions to lower their taxable income. Options such as 401(k)s, SEP IRAs, and Solo 401(k)s deliver notable tax benefits for both owners and staff.

    How Correct Capital Helps: We assist businesses in establishing retirement plans that cut taxes and appeal to prospective and current employees.

  • Not Planning for Profitability and Cash Flow —

    Some businesses only focus on minimizing their current tax bill, neglecting long-term growth and profitability. Such a narrow focus may cause missed opportunities for reinvestment or tax-efficient growth.

    How Correct Capital Helps: Our team provides tax planning that goes beyond short-term cuts, supporting businesses in planning for growth, reinvesting, and handling cash flow efficiently.

  • Neglecting Exit and Estate Planning —

    Business owners often fail to create a succession plan to address the financial aspects of selling their business. Owners frequently concentrate on operations and may neglect how to allocate proceeds from a sale in a tax-effective manner. Additionally, without estate planning, owners may miss opportunities to ensure beneficiaries and loved ones are taken care of.

    How Correct Capital Helps: We provide assistance in exit planning, helping business owners determine where to allocate sale proceeds. We focus on defining the purpose of these funds and addressing them from an estate planning perspective, ensuring beneficiaries are considered and taxes are minimized through careful planning.

Tax Planning| Retirement Planners | Financial Advisor Near Me

Tax Planning in Grand Prairie, TX | Correct Capital Wealth Management

Our Grand Prairie, TX financial advisors and tax planners at Correct Capital know that your financial security—whether for family or business—is crucial now and in the long term. To uphold your trust, we commit to the fiduciary standard and our I.O.U. promise—all advice is independent, objective, and unbiased. With tax laws constantly evolving, it’s essential to have a strong team in place, including your Grand Prairie, TX financial advisor, tax professional, and attorney. For support with tax planning, retirement planning, or any other financial concerns in Grand Prairie, TX, contact Correct Capital at 877-930-4015 or reach out online.


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