Tax Planning in Lakewood, CO

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

Tax Planning in Lakewood, CO. Tax liability refers to the amount you owe in taxes to local, state, and federal authorities. Although paying taxes is unavoidable, various lawful strategies can minimize how much you owe. Tax planning is also vital to successful retirement planning. At Correct Capital, although we do not provide tax advice, we collaborate with local Lakewood, CO people, families, and companies to discover creative and proven ways to lower their tax liability. For instance, we might advise an individual to maximize deductible contributions to their retirement plan, which can help lessen tax costs. 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 Lakewood, CO Individuals and Families

Proactive tax planning can help individuals and families build their retirement savings and provide them with more money for both now and years to come. Here are some key points when tax planning in Lakewood, CO:

  • 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

    If your deductible expenses are higher than these thresholds, itemizing—adding each eligible deduction individually—may be beneficial. The drawback is that itemizing can be time-consuming and requires proof of each deduction. A financial planner in Lakewood, CO can assist in determining whether using the standard deduction or itemizing is more suitable.

  • 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. On the other hand, Roth IRAs do not offer a deduction for contributions, yet allow your money to grow tax-free. The best option depends on your individual financial picture and tax outlook. For example, if you anticipate higher taxes in the future, you might consider transferring money from a traditional IRA to a Roth IRA—a process known as a Roth conversion—paying taxes now but securing future tax-free growth.

    If you have a 401(k) plan with your employer, you can defer income from your paycheck directly to your 401(k). In 2024, the maximum contribution limit for a 401(k) is $23,000, with an additional $7,500 allowed if you’re 50 or older.

    If you're self-employed or have freelance income, you may also establish a retirement plan that suits your situation. Options include a Simplified Employee Pension (SEP) IRA or a One-Participant 401(k) Plan, which allow you to deduct your contributions.

  • Tax-Loss Harvesting

    By selling securities at a loss, you can offset capital gains taxes owed on gains from other investments. This strategy is commonly used with short-term capital gains, as these are usually taxed more heavily than long-term gains. The IRS allows up to $3,000 in capital loss deductions annually, and any unused losses may be applied to 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. Additionally, you might consider paying property taxes early (if allowed by your municipality), prepaying a child’s tuition, or covering your own career-enhancing classes for a Lifetime Learning Credit.

  • If Married, Filing Jointly or Separately —

    Approximately 95% of married couples choose to file jointly, which is the only way to qualify for certain tax credits and deductions. For high-income spouses, filing separately may reduce their tax bracket, depending on income differences. In situations where one spouse has substantial medical expenses, separate filing can help reach the medical deduction threshold.

  • Make Charitable Donations —

    Donating to eligible organizations allows you to deduct as much as 60% of your adjusted gross income. Per IRS Publication 526, eligible organizations may include the following:

    • Religious, scientific, educational, or anti-cruelty non-profit organizations for animals and children
    • Veterans' organizations
    • A domestic fraternal organization that operates under a "lodge system" as long as the funds are directed toward charity
    • Non-profits or companies associated with cemeteries
    • Any U.S. federal, state, local, or Native governments and subdivisions, as long as funds are for public use
    • Canadian, Mexican, or Israeli organizations, provided they meet U.S. charity qualifications

    *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.

    If you are over 70½, you can make a qualified charitable distribution by transferring up to $105,000 per year from a traditional IRA directly to a charity, tax-free. 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 Lakewood, CO, you can reduce your tax liability this year and create a plan for managing taxes through retirement. At Correct Capital, we aim to put more money in your pocket now while preparing you for a secure financial future.

Common Tax Planning Mistakes for Lakewood, CO Individuals and Families

Smart tax planning is vital for your family’s overall financial security. Unfortunately, errors in tax planning often cause people to owe more or miss savings opportunities. Below are some common tax planning errors and how Correct Capital can help you avoid them:

  • Not Maximizing Retirement Contributions —

    By not maximizing contributions to retirement accounts like Traditional IRAs, Roth IRAs, or 401(k)s, you risk losing out on tax deductions and long-term growth opportunities.

    How Correct Capital Helps: We review your financial situation to help you make the most of allowable contributions, lowering your taxes while securing a robust retirement future.

  • 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 —

    Disorganized financial records can lead to missed deductions and complications when filing taxes. Without accurate documentation, you might struggle to substantiate 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 —

    Overlooking the tax impact of investment decisions can diminish your returns. This may include neglecting asset location strategies or failing to harvest tax losses.

    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 —

    Life events, including marriage, divorce, welcoming a child, or buying a property, often alter your tax landscape considerably. Overlooking these changes could result in unforeseen tax bills.

    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. Failure to do so can lead to penalties and interest.

    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 provide tax advantages for covering medical costs, but many eligible individuals miss out by not contributing.

    How Correct Capital Helps: We help you explore the advantages of HSAs and FSAs, advising on how pre-tax contributions for healthcare can lower your taxable income.

  • Overlooking Education Savings Plans —

    Ignoring options like 529 college savings plans can lead to missed tax benefits when saving for a child’s education.

    How Correct Capital Helps: Our team assists you in establishing education savings plans that feature tax-deferred growth and potential state tax deductions.

  • 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 work with you to adjust your withholding allowances for improved cash flow and reduced surprises during tax season.

  • 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 Lakewood, CO Business Owners

Business owners in Lakewood, CO can utilize tax planning strategies to maximize retained earnings in their business. Consider these points when tax planning for your Lakewood, CO business:

  • Review the Structure of Your Business —

    Your business structure plays a significant role in tax planning and should be carefully evaluated. 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 —

    Offering retirement benefits like 401(k)s, 403(b)s, or other defined contribution plans can lower your tax burden. The "SECURE" Act of 2019 changed retirement plan rules for both small and large employers, so it’s wise to consult a financial advisor in Lakewood, CO about how these changes impact tax planning.

    For business owners and employees with higher incomes, a Cash Balance Pension Plan can offer significant tax savings, even if it requires a sizable investment.

  • Have Your Family Work For The Business —

    Employing family members can yield tax advantages. Children can earn up to $14,600 without paying taxes and could start saving in a ROTH IRA. Having your spouse on the payroll can let you double the amount you contribute to retirement.

  • Use a Company Vehicle —

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

    • Use the standard mileage rate to deduct 67 cents per mile (applicable for both gas and electric vehicles); or
    • Track your actual expenses, such as maintenance, registration fees, and fuel, to determine if this amount exceeds the standard mileage rate deduction.
  • Consider Fringe Benefits For Your Employees —

    Boosting employee wages often results in higher employment taxes. Explore the possibility of offering fringe benefits instead of wage raises. Some options that may help lower your tax costs include health insurance, group life insurance, childcare assistance, travel reimbursements, meal programs, paid family leave, and education reimbursements.

    You can implement accountable plans to cover certain employee expenses, such as travel, meals, or entertainment, without reporting them as income.

  • Look into Carryover Deductions —

    When some deductions are unavailable this year, they may be eligible for carryover into future years. These may include deductions such as home office expenses, net operating losses, business credits, and capital losses.

Business tax laws change frequently. One advantage of working with a professional Lakewood, CO tax planner is that they will collaborate with you and your tax professional to find ways to improve long-term financial success.

Common Tax Planning Mistakes for Lakewood, CO Businesses

Efficient tax planning can help businesses reduce tax burdens and boost 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 —

    Some businesses miss or underpay estimated quarterly taxes, which often leads to IRS penalties and added interest. This issue frequently affects small businesses, freelancers, and companies with irregular income.

    How Correct Capital Helps: Our team assists in calculating and timing estimated tax payments to keep businesses compliant with IRS rules 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. Plans like 401(k)s, SEP IRAs, and Solo 401(k)s can provide substantial tax benefits for both owners and employees.

    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. This approach can prevent businesses from taking advantage of strategic investment or growth opportunities.

    How Correct Capital Helps: We offer comprehensive tax planning that extends beyond immediate deductions, helping businesses plan for growth, reinvest profits, and manage cash flow effectively.

  • 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. Without proper estate planning, owners might not fully address their loved ones’ and beneficiaries’ financial security.

    How Correct Capital Helps: Our team supports business owners in exit planning, helping them decide how to manage the proceeds from a sale. 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 in Lakewood, CO | Correct Capital Wealth Management

Correct Capital’s financial advisors and tax planners in Lakewood, CO recognize the importance of financial well-being for your family or business, today and into the future. For this reason, we follow the fiduciary standard and our I.O.U. promise, meaning that every recommendation we provide is independent, objective, and unbiased. Since tax laws are always changing, it’s vital to surround yourself with a solid team, such as your Lakewood, CO financial advisor, tax professional, and legal advisor. For assistance with tax planning, retirement planning, or other financial needs in Lakewood, CO, reach out to Correct Capital at 877-930-4015 or contact us online.


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