Tax Planning in Stockton, CA

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

Tax Planning in Stockton, CA. 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, although we do not provide tax advice, we partner with local Stockton, CA individuals, families, and businesses to find inventive and reliable ways to reduce 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 Stockton, CA Individuals and Families

Smart tax planning can help individuals and families grow their retirement savings and provide them with more money for both today and in the near future. Here are some key points when tax planning in Stockton, 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

    If your deductible expenses exceed these amounts, you may benefit from itemizing your deductions, where you list each eligible deduction separately. However, itemizing requires more time and documentation to verify each deduction. A financial planner in Stockton, CA can assist in determining whether using the standard deduction or itemizing is more advantageous.

  • Review Your Retirement Accounts —

    Roth IRAs and Traditional IRAs both offer tax benefits, but in distinct ways. 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. 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, 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 —

    Approximately 95% of married couples choose to file jointly, which is the only way to qualify for certain tax credits and deductions. However, if one spouse is a higher earner, filing separately might place them in a lower tax bracket. If one spouse incurs significant medical expenses, it might be advantageous to file separately to meet the 7.5% threshold for medical deductions.

  • 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
    • Non-profits supporting veterans
    • Domestic fraternal organizations operating under a "lodge system" if funds go to 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
    • In some cases, Canadian, Mexican, or Israeli organizations if they qualify as U.S.-equivalent charities

    *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.

    If you are over 70½, you can make a qualified charitable distribution by transferring as much as $105,000 a year from a traditional IRA directly to a charity, tax-free. 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.

Using a skilled financial adviser for tax planning in Stockton, CA not only helps lower your tax bill this year but also lays out a strategy for retirement taxes. Correct Capital is here to help you keep more of your money today and establish a financially secure future.

Common Tax Planning Mistakes for Stockton, 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. Below are some common tax planning errors and how Correct Capital can help 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 —

    Many miss out on significant credits and deductions, such as the Earned Income Tax Credit, Child Tax Credit, or deductions for healthcare and education expenses.

    How Correct Capital Helps: We carefully examine your tax return to verify if you’ve taken advantage of all possible credits and deductions, helping to maximize refunds or reduce liabilities.

  • 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 —

    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: Our team provides insight on tax-efficient investment choices, assisting you in minimizing taxes on dividends, interest, and capital gains through strategic asset selection.

  • 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. Ignoring these life events may cause surprise tax liabilities.

    How Correct Capital Helps: We help you adjust your tax strategy based on life changes, allowing you to take advantage of new tax breaks while remaining compliant with tax laws.

  • Underestimating Estimated Tax Payments —

    Income that doesn’t undergo withholding, such as freelance or investment income, often requires estimated tax payments. Neglecting estimated tax payments may result in penalties.

    How Correct Capital Helps: Our team assists in creating a cash reserve plan to ensure you meet estimated tax obligations, reducing the risk of penalties.

  • 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: 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 —

    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

    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 —

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

    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 Stockton, CA Business Owners

Business owners in Stockton, CA can utilize tax planning strategies to maximize retained earnings in their business. Here are some factors to consider for tax planning in your Stockton, CA business:

  • Review the Structure of Your Business —

    How your business is structured is key for tax planning and requires thoughtful consideration. 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 "SECURE" Act of 2019 changed retirement plan rules for both small and large employers, so it’s wise to consult a financial advisor in Stockton, 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. If your spouse works in the business, you may also double your retirement contributions.

  • Use a Company Vehicle —

    Based on your Stockton, 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:

    • 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 —

    Increasing wages for employees can drive up employment tax expenses. See if employees are open to receiving fringe benefits as part of their pay package rather than a higher paycheck. 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.

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

Common Tax Planning Mistakes for Stockton, CA 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 —

    Failing to pay or underpaying quarterly estimated taxes can result in IRS penalties and interest charges. Small businesses, freelancers, and companies with fluctuating income are particularly susceptible to this.

    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. Such a narrow focus may cause missed opportunities for reinvestment or tax-efficient growth.

    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 —

    Many business owners don’t establish a succession plan to handle the financial details involved in selling their business. Often focused on day-to-day business, owners can overlook how to handle proceeds from a sale to minimize taxes. Lacking estate planning, business owners risk missing chances to provide for beneficiaries and loved ones.

    How Correct Capital Helps: We assist business owners with exit planning, guiding them in making informed decisions on how to allocate sale proceeds. Our approach involves identifying the purpose of the funds and applying estate planning strategies, which consider beneficiaries and minimize taxes.

Tax Planning| Retirement Planners | Financial Advisor Near Me

Tax Planning in Stockton, CA | Correct Capital Wealth Management

At Correct Capital, our Stockton, CA financial advisors and tax planners understand how essential the financial health of your family or business is, both now and in the future. To uphold your trust, we commit to the fiduciary standard and our I.O.U. promise—all advice is independent, objective, and unbiased. As tax regulations evolve, it’s important to work with a team that includes your Stockton, CA financial advisor, tax specialist, and attorney. For assistance with tax planning, retirement planning, or other financial needs in Stockton, CA, reach out to Correct Capital at 877-930-4015 or contact us online.


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