Tax Planning in Torrance, CA

Complimentary Planning By Elements

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

Tax Planning in Torrance, 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, we don’t offer tax advice, but we work alongside local Torrance, CA people, families, and companies to explore effective and tried-and-true ways to reduce their tax obligations. 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.



Schedule a Meeting With an Advisor Today

Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.

Schedule a 15-Minute Introductory Call


More From Correct Capital Wealth Management

Explore how Correct Capital Wealth Management can help guide you toward smarter decisions, clearer goals, and lasting financial success.

Subscribe To Our Newsletter Listen To Our Podcast Watch Our YouTube Channel


Tax Planning for Torrance, CA Individuals and Families

Smart tax planning can help individuals and families build their retirement savings and give them more money for both the present and the future. Consider these elements when tax planning in Torrance, 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. The drawback is that itemizing can be time-consuming and requires proof of each deduction. A financial planner in Torrance, CA can work with you to decide whether claiming the standard or itemized deduction is more advantageous.

  • Review Your Retirement Accounts —

    Roth IRAs and Traditional IRAs both present unique tax benefits. Contributions to a traditional IRA may be fully or partially deductible, and taxes are only applied upon withdrawal. Roth IRA contributions, in contrast, are not deductible but allow for tax-free growth on your investments. 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). 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.

    For self-employed individuals or those with freelance income, individual retirement plans are also available. Options include a Simplified Employee Pension (SEP) IRA or a One-Participant 401(k) Plan, with contributions that can be deducted.

  • Tax-Loss Harvesting

    Selling securities at a loss allows you to reduce the capital gains tax on profitable sales. This strategy is commonly used with short-term capital gains, as these are usually taxed more heavily than long-term gains. You can deduct up to $3,000 in capital losses each year, with any remaining losses rolled over into 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. Other potential deductions include prepaying property taxes if permitted, covering future tuition costs, or investing in career-advancing courses to qualify for a Lifetime Learning Credit.

  • If Married, Filing Jointly or Separately —

    Around 95% of married couples file taxes jointly, a method that enables eligibility for specific tax credits and reductions. 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 —

    You can deduct up to 60% of your adjusted gross income by making donations to certain organizations. According to IRS Publication 526, qualifying organizations include:

    • 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
    • Non-profits or companies associated with cemeteries
    • 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

    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.

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

Smart tax planning is vital for your family’s overall financial security. 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 —

    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 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: 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 —

    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: 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 —

    Significant life changes, such as marriage, divorce, becoming a parent, or purchasing a home, can greatly affect your tax obligations. Ignoring these life events may cause surprise tax liabilities.

    How Correct Capital Helps: We collaborate with you to update your tax planning strategies in response to life changes, ensuring you benefit from new deductions or credits and stay compliant with tax regulations.

  • 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 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 —

    Ignoring options like 529 college savings plans can lead to missed tax benefits when 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: Our team helps you adjust your W-4 form to achieve accurate withholding, enhancing cash flow and preventing unexpected tax bills.

  • Missing Opportunities for Charitable Contributions —

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

    How Correct Capital Helps: We help you plan charitable donations to take full advantage of tax benefits, offering assistance with Qualified Charitable Distributions when applicable.

Tax Planning for Torrance, CA Business Owners

Business owners in Torrance, CA can benefit from effective tax planning to retain more money within their business. Keep the following in mind for effective tax planning for your Torrance, CA business:

  • Review the Structure of Your Business —

    How your business is structured is key for tax planning and requires thoughtful consideration. 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 —

    Offering retirement benefits like 401(k)s, 403(b)s, or other defined contribution plans can lower your tax burden. The 2019 "SECURE" Act introduced new retirement plan rules, so consulting a financial advisor about their tax implications may be beneficial.

    For high-income business owners with well-paid employees, consider a Cash Balance Pension Plan. While this may involve substantial contributions, the tax savings can be considerable.

  • 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 —

    Depending on your business activities in Torrance, CA, both you and your employees could use a company vehicle and deduct the associated 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
    • 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. Consider whether employees would prefer fringe benefits instead of direct wage increases. 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.

    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 can’t be claimed this year, it may be possible to carry them forward into a future tax year. Examples of carryover deductions include home office expenses, net operating losses, business credits, and capital losses.

Business tax laws change frequently. One advantage of working with a professional Torrance, CA 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 Torrance, CA Businesses

Effective tax planning allows businesses of all sizes to reduce tax liabilities and increase profitability. Yet, numerous businesses make frequent tax errors that result in increased tax bills, overlooked deductions, and potential penalties. Here’s a look at frequent tax pitfalls and how Correct Capital can help businesses steer clear of them.

  • Not Paying Estimated Quarterly Taxes —

    Some businesses miss or underpay estimated quarterly taxes, which often leads to IRS penalties and added interest. Small businesses, freelancers, and companies with fluctuating income are particularly susceptible to this.

    How Correct Capital Helps: We provide support in calculating and scheduling estimated taxes so you meet IRS requirements 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. 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: 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 short-term focus can result in missed chances for strategic investments or tax-efficient growth strategies.

    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. Often focused on day-to-day business, owners can overlook how to handle proceeds from a sale to minimize taxes. Additionally, without estate planning, owners may miss opportunities to ensure beneficiaries and loved ones are taken care of.

    How Correct Capital Helps: We assist business owners with exit planning, guiding them in making informed decisions on how to allocate sale proceeds. 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 Torrance, CA | Correct Capital Wealth Management

Correct Capital’s financial advisors and tax planners in Torrance, CA recognize the importance of financial well-being for your family or business, today and into 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 Torrance, CA financial advisor, tax specialist, and attorney. For support with tax planning, retirement planning, or any other financial concerns in Torrance, CA, contact Correct Capital at 877-930-4015 or reach out online.


Are you ready to experience the Correct Capital difference?

GET STARTED

Meet our team of financial advisors.

Our Team

Services We Offer