Around this time of the year, busy professionals suddenly find themselves even busier by having to prepare for tax season by gathering financial documents, reviewing new tax laws, and learning about ways to save on their taxes. Before you know it, you are in the heart of tax season and are not as prepared as you should be.
For many Americans, who pay close attention to their taxes, it’s important to research and find out what breaks you qualify for well in advance. CPA’s must be well-equipped to offer the correct advice on available credits and deductions, as well as, help you plan out your investments.
If you are self-employed, filing taxes can be more complicated than just filling out a few forms. You need to be aware of not only income and deductions but basis considerations, what constitutes as capital contributions and distributions, and how to optimize capital structures to balance debt and equity ratios. You also may be eligible for additional tax benefits, which you may not be aware of. Your tax preparer may not be qualified to offer you comprehensive advice or consulting that helps you pay less to the government and keep what you rightly deserve.
Similarly, if you are a financial executive for a company and need complete financial analysis and provide sound business advice for management, it is better to opt for a full-service accounting firm such as Long Island Tax and Planning Inc., that would offer a comprehensive suite of services covering various aspects of your professional profile, earnings, and investments with expertise and full domain knowledge.
Tax Preparation and Planning
Does your current accountant give you proactive advice on how the current changes in laws will affect not only your current income tax but also your future tax liability? Managing income tax withholding is a tricky issue… You wouldn’t want to have too much money be withheld or sent to the government if it’s not necessary. After all, who likes to loan out to the government if you can help it. Nor would you want to owe a large sum to the IRS when you file taxes in the spring.
A full-service accounting firm such as Long Island Tax & Planning will help you proactively manage both your personal and your business tax issues, including understanding how upcoming business opportunities impact your tax status and vice versa. A full-service accounting firm would be constantly trying to identify ways to reduce federal, state or local tax liabilities and help you benefit from any new opportunities and changes.
Wealth Management and Retirement Planning
As a senior corporate professional, it is always better to plan out your finances in a way that allows you to retire comfortably. A full-service accounting firm positions your asset management and investment management in a way that minimizes your tax liabilities.
For example, according to US News, a change that could disproportionately affect those living in New York is the restriction on the amount of mortgage interest that can be deducted. Currently, taxpayers can deduct interest on a mortgage of up to $1 million. Starting in 2018, only interest on the mortgage value capped at $750,000 will be deductible.
US News further advises quoting tax experts, “You have until April 15, 2019, to make tax-deductible contributions to IRAs and health savings accounts. However, contributions to traditional 401(k) plans must be made by Dec. 31 if you want to deduct them from your taxes in the spring. Using a bonus to make a one-time contribution is a smart move.”
Wondering how to manage your stocks investments? It’s important to consider both financial and tax consequences when making decisions. You would not want to sell stocks without considering the holding period. For example, if you have a stock that has appreciated in value but you’ve only held it for 11 months, you should wait a month and a day if you expect the value to remain constant because the difference in tax rates could be in excess of a 15% difference.
There are many other tax tips, which may work to your benefit but only if you get the correct advice at the right time. There are new credits and deductions that were adjusted for 2018 or altered under the tax reform bill such as the small business tax deduction (section 199A), the elimination of unreimbursed business expenses, expansion of the child tax credit, and changes to the allowed use of 529 funds that Long Island Tax and Planning Inc. can help you navigate under for both the federal tax code and New York State.
Simply put, in order to figure your way around the new laws and opportunities, you need a competent financial team who will help you secure your financial future. And rather than approaching various experts on different financial issues, it is better to get all the solutions under one roof from a reliable full-service accounting firm.
Need more information?
Please reach out to us to have a Long Island CPA implement these strategies for you at 631-661-8410 or email us at office@longislandtax.net.
