Tax Planning in Huntleigh, MO

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

Tax Planning in Huntleigh, MO. Tax liability is how much taxes you pay each year to local, state, and federal entities. Even though taxes may be one of the two certainties in life, The IRS allows for several ways to reduce how much money you have to pay. Tax planning is also essential to planning the retirement of your dreams. At Correct Capital, we work with local Huntleigh, MO individuals, families, and businesses to find creative and proven strategies for reducing their tax burden. Call Correct Capital's financial planners and fiduciary advisors today at 877-930-4015, contact us online, or read on to see how judicious tax planning can benefit you.


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Tax Planning for Huntleigh, MO Individuals and Families

Diligent tax planning is essential for individuals and families who want to put more in their retirement accounts and afford them more money for both now and the near future. Ways to reduce your tax liability when tax planning in Huntleigh, MO are:

  • Standard Deduction vs. Itemizing —

    The standard deduction is specific dollar amount that ensures all tax payers have at least some income that is not taxable. In 2022 and 2023, the standard deductions are:

    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 itemize your return. The disadvantage is that it will take longer to fill out your return, and you will have to document why you are eligible for the deduction when you send your returns.

  • Review How You Are Saving For Retirement —

    Roth IRAs and Traditional IRAs both offer tax benefits in different ways. Savings you put into a traditional IRA may be fully or partially deductible, and you pay taxes on it when you withdraw it. Savings put into a Roth IRA do not affect your taxable income, but you will not be taxed on the withdrawal, as long certain requirements are met. Your age, income, and other factors will determine whether a Traditional or Roth IRA is preferable in terms of tax planning. For example, if you anticipate have more tax liability in the future, you can move funds from a traditional IRA to a Roth IRA to pay taxes on the conversation, while allowing the money to grow tax-free.

    If you have a 401(k) plan with your employer, you can choose to defer income from your paycheck and have it placed directly in your 401(k). You can contribute up to $20,500 to a 401(k) in 2022, or up to $27,000 if you're at least 50 years old. For 2023, you can deposit as much as $22,500 with an extra $7,500.

    If you're self-employed, 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 use that loss to reduce your taxable capital gains. This strategy is utilized more with short-term capital gains, as the tax rate is often higher than long-term. You can deduct up to $3,000 in capital gains losses per year, but you may be able to deduct higher losses down the road.

  • 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. Paying property taxes early can also help you reduce your taxable income, and you can pay tuition to an undergraduate, graduate and professional degree courses for your or a child, as well as courses that improve your job skills in order to qualify for a Lifetime Learning Credit.

  • If Married, Filing Jointly or Separately —

    More than 9 out of 10 married couples choose to file joint tax returns. It helps couples qualify for a higher standard deduction, as well as a variety of tax credits not available to single filers. But, if both spouses have substantial earnings, filing separately may reduce their combined tax liability. If one spouse received considerable medical treatment in a given year, it may be preferable to file separately to qualify for the 7.5% threshold for medical deductions.

  • Contribute to Charity —

    You can deduct up to 60% of your adjusted gross income via charitable donations. Accepted organizations 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," as long as the donations are used for charity
    • Cemetery companies
    • Any U.S. federal, state, local, or Native governments and subdivisions, as long as the funds are for public use
    • Often, a Canadian, Mexican, or Israeli organization, as long as the organization meets the criteria for a charity under United States law

    If you open a Donor-Advised Fund, you can contribute a bulk amount now for an immediate tax reduction, and recommend how the funds are distributed over the years that follow.

    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 without having to pay taxes on it. If you are 72 or older, that donation qualifies as your required minimum distribution.

When you consult with a knowledgeable financial adviser for your tax planning in Huntleigh, MO|With the help a financial adviser in Huntleigh, MO, you can not only reduce your tax liability this year, but plan out your taxes into retirement.



Tax Planning for Huntleigh, MO Business Owners

Business owners can use effective tax planning to retain more money in their business. Ways to owe less in taxes when tax planning for your Huntleigh, 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 Your Employees' Employer-Sponsored Retirement Plans —

    There are many benefits to offering employees a retirement plan, and reducing your tax liability is chief among them. 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 Huntleigh, MO about how those changes affect your tax planning.

    For higher-earning business owners with higher-earning employees, consider a Cash Balance Pension Plan. While you must considerable sums of money each year, the tax benefits are high.

  • Consider Other Benefits For Your Employees —

    Merely offering more money can result in higher employment tax costs. Ask your employees if they would be open to fringe benefits as part of their compensation, instead of just giving them a raise. Common fringe benefits include medical insurance, group life insurance, help with childcare costs, transportation reimbursement, meals, more paid time off, or continuing education reimbursement.

    You can also use accountable plans to pay employees back for certain expenses like travel, meals, or entertainment without having to report them as employee income.

  • Put Your Family to Work —

    If you hire your children, they do not have to pay taxes on their first $12,000 in income, and you can help them start saving for retirement through an account like a ROTH IRA. If both you and your spouse work for the business, you can double your retirement plan contributions.

  • Buy a Company Vehicle —

    If you and your employees need to drive as part of the normal course of your business, you can deduct the transportation costs. There are two different ways of deducting those expenses:

    • Take advantage of the standard mileage rate to deduct 58.5 cents per mile (for January to June in 2022) or 62.5 cents per mile (for the last half of 2022); or
    • Keep a record of your actual expenses, like maintenance, registration fees, and gas, and calculate if your deduction would be more than the standard mileage rate
  • 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 subsequent years. Common carryover deductions are a home office deduction, net operating losses, business credits, and capital losses.

Tax laws for businesses are always in flux. A key advantage of working with a knowledgeable Huntleigh, MO tax planner is that they will work with you and the person who prepares your taxes to discover if there are ways to improve your long-term financial success.

Other services we offer in Huntleigh, MO include:

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

Tax Planning in Huntleigh, MO | Correct Capital Wealth Management

At Correct Capital, our Huntleigh, MO financial advisors 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 Huntleigh, MO financial advisor, tax preparer, and attorney. For help with tax planning, retirement planning, or any other financial needs in Huntleigh, MO, call Correct Capital today at 877-930-4015 or contact us online.


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