Tax Planning in Long Beach, CA

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

Tax Planning in Long Beach, CA. Tax liability refers to the amount you owe in taxes to local, state, and federal authorities. While Uncle Sam will always get some portion of your earnings or profits, there are perfectly legal ways to reduce your tax liability. Tax planning is also vital to successful retirement planning. At Correct Capital, we don’t offer tax advice, but we work alongside local Long Beach, CA residents, families, and business owners to discover creative and proven ways to decrease their tax burden. 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, get in touch online, or continue reading to understand the benefits of prudent tax planning.



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Tax Planning for Long Beach, CA Individuals and Families

Effective tax strategies can help individuals and families increase their retirement savings and provide them with more money for both the present and the future. Consider these elements when tax planning in Long Beach, CA:

  • Standard Deduction vs. Itemizing —

    The standard deduction is a automatic amount that you can deduct from your taxable income without additional documentation. 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. However, itemizing requires more time and documentation to verify each deduction. A financial planner in Long Beach, CA can assist in determining whether taking 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. Unlike traditional IRAs, Roth IRA contributions are non-deductible, but your funds grow without future taxes. The ideal choice depends on your personal financial and tax situation. If you expect future tax rates to increase, a Roth conversion, or moving funds from a traditional IRA to a Roth IRA, might be wise to lock in tax-free growth while paying taxes upfront.

    If you have a 401(k) plan with your employer, you can defer income from your paycheck directly to 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.

    Freelancers or self-employed individuals can open up personal retirement plans tailored to their needs. Options include a Simplified Employee Pension (SEP) IRA or a One-Participant 401(k) Plan, enabling you to deduct your contributions.

  • Tax-Loss Harvesting

    Selling securities at a loss allows you to reduce the capital gains tax on profitable sales. This approach is particularly beneficial for short-term capital gains, which are often taxed at higher rates 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 —

    If you have unreimbursed medical expenses, you may be able to deduct amounts exceeding 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 —

    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 —

    Donating to eligible organizations allows you to deduct as much as 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
    • Organizations dedicated to veterans
    • Fraternal organizations under a "lodge system" provided funds are used for charity
    • Non-profits or companies associated with cemeteries
    • Government agencies at any level within the U.S. when funds are for public benefit
    • Certain Canadian, Mexican, or Israeli organizations that would be considered charitable under U.S. law

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

    By opening a Donor-Advised Fund, you can make a large contribution now for an immediate tax deduction and recommend how the funds are allocated in the future.

    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. At age 73 and over, this donation meets the requirements for your required minimum distribution and could lessen both future required distributions and your tax bill.

When you choose an experienced financial adviser for tax planning in Long Beach, CA, you’re able to reduce current tax liability while planning for taxes well into 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 Long Beach, CA Individuals and Families

Effective tax planning is crucial for your family’s financial health. Yet, many people unintentionally make errors that could result in higher tax liabilities or missed savings opportunities. Here’s a look at some typical tax planning missteps and how Correct Capital helps you avoid 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: We evaluate your financial situation to ensure you’re contributing as much as feasible, which can reduce taxable income while building a strong retirement foundation.

  • 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 team checks your tax return for any missed credits and deductions, with the goal of increasing your refund or decreasing your tax bill.

  • 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. 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 —

    If you earn income not subject to withholding, such as freelance or investment income, estimated tax payments may be necessary. Failure to do so can lead to penalties and interest.

    How Correct Capital Helps: We work with you to build cash reserves to cover estimated tax payments, helping you avoid penalties and interest fees.

  • 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: 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 guide you in setting up education savings accounts that provide tax-deferred growth and may offer state tax deductions.

  • Not Reviewing Withholding Allowances

    Withholding too much or too little tax from your paycheck often leads to surprises at tax time, like large refunds or owing taxes.

    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 —

    If you don’t track or plan your charitable contributions, you could lose valuable deduction opportunities.

    How Correct Capital Helps: Our advisors help you strategize charitable contributions to maximize deductions, including guidance on Qualified Charitable Distributions if eligible.

Tax Planning for Long Beach, CA Business Owners

Business owners in Long Beach, CA can benefit from effective tax planning to retain more money within their business. Consider these points when tax planning for your Long Beach, CA business:

  • Review the Structure of Your Business —

    Your business structure plays a significant role in tax planning and should be carefully evaluated. Forming your business as an LLC, sole proprietorship, partnership, or S or C corporation will influence both the corporate and personal tax rates.

  • Review the Retirement Plans You Offer Employees —

    Providing retirement plans such as 401(k)s, 403(b)s, or other defined contribution plans is an effective way to reduce tax liability. 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 Long Beach, CA 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 —

    Bringing family into the business offers tax perks, such as allowing children to work tax-free up to $14,600, and they can even start contributing to a ROTH IRA. Employing your spouse can allow for increased retirement contributions, potentially doubling your retirement savings.

  • Use a Company Vehicle —

    Based on your Long Beach, CA business type, you and your employees may qualify to use a company vehicle with deductible transportation costs. There are two options for claiming this deduction:

    • Take the standard mileage deduction of 67 cents per mile for gas and electric vehicles; or
    • Maintain records of actual costs like maintenance, registration, and fuel to calculate whether this deduction is greater than the standard mileage rate.
  • Consider Fringe Benefits For Your Employees —

    Raising employee salaries may lead to increased employment tax costs. Explore the possibility of offering fringe benefits instead of wage raises. 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 can also be used to reimburse employees for expenses like travel, meals, or entertainment without these amounts being reported as employee 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. These may include deductions such as home office expenses, net operating losses, business credits, and capital losses.

Tax laws for businesses are constantly evolving. Partnering with a professional tax planner in Long Beach, CA means they work with you and your tax expert to identify strategies for enhancing long-term financial outcomes.

Common Tax Planning Mistakes for Long Beach, CA Businesses

With smart tax planning, businesses can minimize liabilities and enhance profitability. However, many businesses fall into common tax mistakes that may lead to higher taxes, missed deductions, or even penalties. Listed below are typical tax planning mistakes businesses make and how Correct Capital assists in avoiding 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 help businesses accurately calculate and schedule estimated tax payments, ensuring compliance with IRS deadlines and preventing unnecessary penalties.

  • Neglecting Retirement Plan Contributions for Owners and Employees —

    Retirement plan contributions are often underused by businesses to reduce 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: Our team helps set up and optimize retirement plans that lower taxes and serve as a tool for recruiting and retaining employees.

  • Not Planning for Profitability and Cash Flow —

    Focusing solely on cutting current taxes often leads businesses to miss out on planning for sustained growth and profitability. This short-term focus can result in missed chances for strategic investments or tax-efficient growth strategies.

    How Correct Capital Helps: We deliver thorough tax planning to support future growth, optimize reinvestment, and ensure efficient cash flow management.

  • Neglecting Exit and Estate Planning —

    Business owners often fail to create a succession plan to address the financial aspects of selling their business. While they may focus heavily on operations, they might miss planning for how to manage and allocate the sale proceeds in a tax-efficient way. 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 aim to identify the purpose of sale proceeds and apply estate planning principles, so beneficiaries are accounted for and taxes are efficiently managed.

Tax Planning in Long Beach, CA | Correct Capital Wealth Management

Correct Capital’s financial advisors and tax planners in Long Beach, CA 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 Long Beach, CA financial advisor, tax professional, and legal advisor. For assistance with tax planning, retirement planning, or other financial needs in Long Beach, CA, reach out to Correct Capital at 877-930-4015 or contact us online.


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