Tax Planning in St. Louis, MO

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

Tax Planning in St. Louis, MO. Tax liability refers to how much you owe in taxes to local, state, and federal authorities. Even though taxes may be one of the two certainties in life, The IRS allows for several ways you can reduce how much you owe. Tax planning is also essential to planning the golden years of your dreams. At Correct Capital, we work with St. Louis, MO individuals, families, and businesses in the St. Louis, MO area to find creative and proven ways to reduce their tax burden. Call Correct Capital's financial planners and fiduciary advisors today at 877-930-4015, contact us online, or read the article below to discover how judicious tax planning can keep more money in your pocket both now and in the future.


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Tax Planning for St. Louis, MO Individuals and Families

Smart tax planning is essential for individuals and families who want to increase their retirement savings and have extra money for the short-term. Some things to take advantage of when tax planning in St. Louis, MO include:

  • Standard Deduction vs. Itemizing —

    The standard deduction is specific dollar amount that ensures all tax payers have at least some income that won't be taxed. 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 itemize your return. The disadvantage is that filing will be more complicated, and you will have to document why you are eligible for the deduction when you send your returns.

  • Evaluate Your Retirement Accounts —

    Roth IRAs and Traditional IRAs differ in how your savings are taxed. Contributions to a traditional IRA can be deducted from your taxable income, and you pay taxes on it when you withdraw it. Roth IRA contributions cannot be deducted from your taxable income, but the money grows tax free. Your age, income, and other factors will determine whether a Traditional or Roth IRA is preferable in terms of tax planning. For instance, if you expect your taxes to go up in the future, you can convert funds from a traditional IRA to a Roth IRA to pay taxes on the transfer, and enjoy tax-free withdrawals when you need the money in retirement.

    If you have a 401(k) plan with your employer, you can choose to have money deposited into your 401(k) account instead of it going to your paycheck. You can place up to $20,500 to a 401(k) in 2022, plus an extra $6,500 if you're at least 50 years old. For 2023, you can contribute up to $22,500 with an extra $7,500.

    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 the money you put there from your taxable income.

  • Tax-Loss Harvesting

    If you sell stocks, bonds, or options at a loss, you can offset the amount of capital gains tax you would be liable for if other securities sold at a profit. Tax-loss harvesting is more common with short-term capital gains, as the tax rate is often 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 deduct those that are greater than 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 kid's tuition or for career-boosting classes for you early 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's the only way to qualify for certain tax credits and reductions. But, if both spouses have substantial earnings, filing separately may reduce their combined tax liability. If one spouse received substantial medical treatment in a given year, it may be preferable to file separately to meet the 7.5% limit for unreimbursed medical expenses.

  • Contribute to Charity —

    You can deduct up to 60% of your adjusted gross income when donating to certain organizations. Accepted charities are:

    • 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 donations are used for charity
    • Cemetery companies
    • Any U.S. federal, state, local, or Native governments and subdivisions, under the condition that the funds are meant to benefit the public
    • In many cases, a Canadian, Mexican, or Israeli organization, as long as the organization would qualify as a charity under U.S. law

    If you start 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 called 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 donation counts as your required minimum distribution.

When you consult with an experienced financial adviser for your tax planning in St. Louis, MO|With the help a financial planner in St. Louis, MO, you can not only pay less in taxes this year, but plan out your taxes into retirement.



Tax Planning for St. Louis, MO Businesses

With diligent tax planning, business owners can keep as much of their profits as possible. Ways to reduce your tax liability when tax planning for your St. Louis, MO business include:

  • Assess How Your Business Is Structured —

    A lot goes into the structure of a business, and tax planning should be considered. Structuring your business as an LLC, sole proprietorship, partnership, or S or C corporation will have consequences for both your corporate and your individual tax rate.

  • Review Your Employees' Employer-Sponsored Retirement Plans —

    Offering your employees retirement plans, such as 401(k)s, 403(b)s, and other defined contribution plans is a great way to reduce your tax liability. The "SECURE" Act of 2019 offers new benefits for employers who offer certain retirement plans, so it's likely in your best interest to meet with a financial advisor in St. Louis, MO about how they may apply to your business.

    a good idea if you and your employees are both higher-earning. While a business owner would need to considerable amounts of money per year, the tax saving can be significant.

  • Consider Fringe Benefits For Your Employees —

    Just offering more money can lead to higher employment tax costs. See if your employees would be willing to accept other benefits as part of their compensation, instead of just rewarding them with a raise. Common fringe benefits include medical insurance, group life insurance, childcare assistance, transportation reimbursement, meals, sick leave, or paying for career-boosting courses.

    You can also use accountable plans to pay employees back for business expenses without counting the reimbursement as income.

  • Have Your Family Work For The Business —

    If you hire your children, 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 such as 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. There are two different ways of deducting those expenses:

    • Take advantage of the standard mileage rate to deduct 58.5 cents per mile (for the first half of 2022) or 62.5 cents per mile (for the last six months of 2022); or
    • Keep a record of your actual expenses, like maintenance, registration fees, and gas, and determine if your deduction would be more than the standard mileage rate
  • Consider Tax Loss Carryover —

    You're allowed to carryover some deductions into another year. These can include a home office deduction, net operating losses, business credits, and capital losses.

Congress are always making new tax laws for businesses, or changing old ones. A key advantage of consulting with an experienced St. Louis, MO tax planner is that they will work with you and your tax professional to determine if there are ways to improve your personal and business financial success.

Other services we offer in St. Louis, MO include:

Tax Planning St. Louis, MO | Retirement Planners | Financial Advisor Near Me

Tax Planning in St. Louis, MO | Correct Capital Wealth Management

At Correct Capital, our St. Louis, MO tax planners know strong financial health is key to your overall success. That is why we hold ourselves to the fiduciary standard: we are legally and ethically bound to do what's best for you and only you. With tax law always changing, you need a team around you that will help, like your St. Louis, MO financial advisor, tax professional, and attorney. For help with tax planning, retirement planning, or any other financial needs in St. Louis, MO, call Correct Capital today at 877-930-4015 or contact us through our website.


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