Tax Planning in Toledo, OH

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

Tax Planning in Toledo, OH. 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, we don’t offer tax advice, but we partner with local Toledo, OH people, families, and companies to discover creative and proven ways to decrease their tax burden. We could suggest maximizing deductible retirement contributions, which could reduce tax costs. Reach out to Correct Capital's tax planners and fiduciary advisors today at 877-930-4015, contact us online, or read on to see how effective tax planning can make a difference.



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Tax Planning for Toledo, OH Individuals and Families

Proactive tax planning can help individuals and families increase their retirement savings and give them more money for both the present and the future. A few things to consider when tax planning in Toledo, OH:

  • 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

    When your deductible income is more than the standard deduction, itemizing each eligible deduction may be advantageous. The trade-off is that itemizing takes more time, as you need to provide evidence for each deduction. A financial planner in Toledo, OH can work with you to decide whether claiming the standard or itemized deduction is more beneficial.

  • Review Your Retirement Accounts —

    Roth IRAs and Traditional IRAs both provide tax advantages, though in different ways. A traditional IRA allows for contributions that may be deductible, with taxes deferred until you withdraw funds. Unlike traditional IRAs, Roth IRA contributions are non-deductible, but your funds grow without future taxes. The best option depends on your individual financial picture and tax outlook. One potential strategy is a Roth conversion, which moves funds from a traditional to a Roth IRA, letting you pay taxes now and enjoy tax-free growth later.

    If you have a 401(k) plan with your employer, it's possible to defer part of your salary directly into your 401(k) account. The 401(k) contribution limit for 2024 is $23,000, along with an additional $7,500 for individuals 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

    If you sell securities at a loss, you can offset the amount of capital gains tax owed on profits from other securities. Tax-loss harvesting is especially useful for short-term gains, where tax rates are higher than for 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 —

    Medical expenses not reimbursed by insurance can be deducted if they exceed 7.5% of your AGI. 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. In cases where one spouse earns more, filing separately could result in a lower tax bracket for the higher earner. In situations where one spouse has substantial medical expenses, separate filing can help reach the medical deduction threshold.

  • Make Charitable Donations —

    By donating to qualifying organizations, you may deduct up to 60% of your adjusted gross income. Under IRS guidelines, the following types of organizations may qualify:

    • Religious, scientific, educational, or anti-cruelty non-profit organizations for animals and children
    • Non-profits supporting veterans
    • Fraternal organizations under a "lodge system" provided funds are used for charity
    • Cemetery companies or organizations
    • Federal, state, local, or Native government entities, provided funds are for public purposes
    • Canadian, Mexican, or Israeli organizations, provided they meet U.S. charity qualifications

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

    Opening a Donor-Advised Fund allows for an upfront tax deduction with the flexibility to recommend how funds are distributed over time.

    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. 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.

Using a skilled financial adviser for tax planning in Toledo, OH not only helps lower your tax bill this year but also lays out a strategy for retirement taxes. 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 Toledo, OH Individuals and Families

Smart tax planning is vital for your family’s overall financial security. However, mistakes in tax planning can lead to paying more in taxes than necessary or missing out on potential savings. 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 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 —

    Many people miss out on important tax credits and deductions, such as the Earned Income Tax Credit, Child Tax Credit, or deductions for education and medical expenses.

    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 —

    When financial records are disorganized, it’s easier to overlook deductions and face issues at tax time. Proper documentation is critical for substantiating claims, especially during audits.

    How Correct Capital Helps: We work with you to create efficient record-keeping practices and gather needed documentation, so all records are accessible when tax season arrives or if an audit occurs.

  • 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. Neglecting to adjust for these changes can lead to unexpected 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 —

    If you earn income not subject to withholding, such as freelance or investment income, estimated tax payments may be necessary. Without making these payments, you could face fines and interest charges.

    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 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 —

    By not using options like 529 plans, you could miss out on tax benefits that aid in saving for a child’s education.

    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

    Having too much or too little tax withheld from your paycheck can lead to either a large 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 —

    Not properly documenting charitable donations can lead to missed tax 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 Toledo, OH Business Owners

Business owners in Toledo, OH can benefit from effective tax planning to retain more money within their business. Here are some factors to consider for tax planning in your Toledo, OH business:

  • Review the Structure of Your Business —

    The structure of your business impacts tax planning and should be carefully considered. Structuring your business as an LLC, sole proprietorship, partnership, or S or C corporation will affect both corporate and individual tax rates.

  • 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 Toledo, OH about how these changes impact tax planning.

    If you’re a high-earning business owner with high-income employees, a Cash Balance Pension Plan could be advantageous, though it requires large contributions.

  • 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 —

    Depending on your business activities in Toledo, OH, both you and your employees could use a company vehicle and deduct the associated 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 —

    Boosting employee wages often results in higher employment taxes. Consider whether employees would prefer fringe benefits instead of direct wage increases. Examples that could help reduce your tax liability include medical insurance, group life insurance, childcare support, transportation reimbursements, meal programs, family or medical leave, and reimbursement for continued education.

    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 —

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

Tax regulations for businesses are always in flux. Working with a Toledo, OH tax planner offers the benefit of joint efforts with your tax professional to explore methods for boosting your financial future.

Common Tax Planning Mistakes for Toledo, OH 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. Listed below are typical tax planning mistakes businesses make and how Correct Capital assists in avoiding them.

  • Not Paying Estimated Quarterly Taxes —

    Businesses may overlook or underpay quarterly estimated taxes, which can lead to penalties and interest from the IRS. 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 —

    Many companies miss the opportunity to use retirement contributions to lower their 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 —

    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 —

    Many business owners don’t establish a succession plan to handle the financial details involved in 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. Lacking estate planning, business owners risk missing chances to provide for beneficiaries and loved ones.

    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 Toledo, OH | Correct Capital Wealth Management

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


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