Tax Planning in Town and Country, MO

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Tax PlanningReduce Your Tax Liability With Correct Capital's Financial Advisors in Town and Country, MO

Tax Planning in Town and Country, MO. Tax liability refers to how much taxes you pay each year to local, state, and federal governments. While Uncle Sam will always collect some percentage of your earnings or profits, The IRS allows for several ways to reduce how much money you have to pay. Tax planning is also important for successful retirement planning. At Correct Capital, we work with local Town and Country, MO individuals, families, and businesses to find creative and time-tested ways to reduce how much they owe. Speak to Correct Capital's tax planners and fiduciary advisors today at 877-930-4015, contact us through our website, or read on to see how judicious tax planning can benefit you.


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Tax Planning for Town and Country, MO Individuals and Families

Prudent tax planning can help individuals and families increase their retirement savings and have extra money for the short-term. Some things to take advantage of when tax planning in Town and Country, MO are:

  • Standard Deduction vs. Itemizing —

    The standard deduction is specific dollar figure that you can deduct from your taxable income. 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 count up each deduction you're eligible for one by one. The drawback 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. Money you put into a traditional IRA can be deducted from your taxable income, and the money is not taxed until you withdraw it. Roth IRA contributions cannot be deducted from your taxable income, but you will not be taxed on the withdrawal, as long certain requirements are met. Your unique situation will determine what may be better for you in terms of tax planning. For instance, if you anticipate being in a higher tax bracket in the future, you can convert funds from a traditional IRA to a Roth IRA to pay taxes on the transfer, while allowing the money to grow tax-free.

    If you have a 401(k) plan through your job, you can choose to have earnings 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 deposit as much as $22,500 or $30,000.

    If you're have freelance income, there are also retirement plans available, like a One-Participant 401(k) Plan, and you can deduct the money you put there from your taxable income.

  • Tax-Loss Harvesting

    If you lose money on the sale of any securities, you can offset the amount of capital gains tax you would have to pay if other securities sold at a profit. This strategy is more common with short-term capital gains, as the tax rate is typically 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 unreimbursed medical expenses, you can deduct those that are greater than 7.5% of your adjusted gross income. Paying property taxes early can also lead to deductions, and you can pay for a child's tuition or for career-boosting classes for you early in order to qualify for a Lifetime Learning Credit.

  • If Married, Filing Jointly or Separately —

    The IRS says that roughly 95% of married couples choose to file joint tax returns. It's the only way to qualify for certain tax credits and reductions. However, if both spouses have considerable earnings, they may be in a lower tax bracket if they file separately. If one spouse received considerable medical treatment in a given year, it may be preferable to file separately to qualify for the 7.5% threshold for unreimbursed medical expenses.

  • Make Charitable Donations —

    You can deduct up to 60% of your adjusted gross income via charitable donations. Accepted charities include:

    • 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 funds are used for charity
    • Cemetery organizations
    • Any government entities, as long as the funds are for public use
    • In many cases, a Canadian, Mexican, or Israeli organization, under the condition that the organization would qualify as a charity under U.S. law

    If you open a Donor-Advised Fund, you can get a tax reduction by putting money into it now, while still being able to wait to decide how the funds will get distributed down the road.

    If you are at least 70½ years old, you can make what's called a qualified charitable distribution by transferring no more than $100,000 a year from a traditional IRA directly to a charity tax-free. If you are 72 or older, that donation qualifies as your required minimum distribution.

When you use an experienced financial adviser for your tax planning in Town and Country, MO|With the assistance of a financial adviser in Town and Country, MO, they can help put more money in your pocket this year while also setting you up for a financially secure retirement.



Tax Planning for Town and Country, MO Businesses

With prudent tax planning, business owners can keep as much of their profits as possible. Ways to reduce your tax liability when tax planning for your Town and Country, MO business include:

  • Assess the Structure of Your Business —

    There are many things to consider when deciding how to structure or restructure your business. 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.

  • Assess the Retirement Plans You Offer Employees —

    There are many benefits to offering employees a retirement plan, and reducing your tax liability is chief among them. The "SECURE" Act of 2019 offers new benefits for employers who offer certain retirement plans, so it's recommended to meet with a financial advisor in Town and Country, MO about how they may apply to your business.

    For higher-earning business owners with higher-earning employees, consider a Cash Balance Pension Plan. While you would need to considerable amounts of money per year, the tax benefits are high.

  • Consider Other Benefits For Your Employees —

    Just offering raises can lead to higher taxes for you. Ask your employees if they would be open to other benefits rather than just rewarding them with a raise. Common fringe benefits include medical insurance, group life insurance, help with childcare costs, transportation reimbursement, meals, more paid time off, or paying for courses that help in their career.

    You can also use accountable plans to pay employees back for business expenses without having to report them as employee income.

  • Have Your Family Work For The Business —

    If you get your children on the payroll, they do not have to pay taxes on their first $12,000 in income, and you can help them start saving for retirement through an account such as a ROTH IRA. You can double your retirement plan contributions if your spouse work for the business.

  • Use a Company Vehicle —

    If you and your employees need to drive as part of the normal course of your business, you can deduct the transportation costs. You can make the deduction in two ways:

    • Take advantage of the standard mileage rate to deduct 58.5 cents per mile (for January to June in 2022) or 62.5 cents per mile (for the last half of 2022); or
    • Document your actual expenses, like maintenance, registration fees, and gas, and figure out whether those allow you to deduct more than the standard mileage rate would have
  • Consider Tax Loss Carryforward —

    If you're not able to make certain deductions this year, you may be able to carry them over into subsequent years. These can include a home office deduction, net operating losses, business credits, and capital losses.

US lawmakers are always making new tax laws for businesses, or adjusting old ones. A key advantage of consulting with a professional Town and Country, MO tax planner is that they will work with you and the person who prepares your taxes to discover if there are ways to improve your long-term financial success.

Other services we offer in Town and Country, MO include:

Tax Planning Town and Country, MO | Retirement Planners | Financial Advisor Near Me

Tax Planning in Town and Country, MO | Correct Capital Wealth Management

At Correct Capital, our Town and Country, MO financial advisors know strong financial health is essential 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, it's important to put a team around you that will help, like your Town and Country, MO financial advisor, tax professional, and attorney. For help with tax planning, asset management, or any other financial services in Town and Country, MO, call Correct Capital today at 877-930-4015 or contact us through our website.


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