What is wealth? Wealth is not what you earn in your initial phase of life but its how much you keep and how long you keep it. In order to keep your wealth preserved, one should know the basics of tax savings.
Availing deductions is not the only thing tax planning is all about, but planning investments and finances in such a way to preserve wealth for future is supreme.
Taxes could wipe out half of your wealth and leave your beneficiaries with just a small amount of what you worked for so long to assemble. Each year there are new tax regulations which make Tax Filing a difficult process for someone, not an expert. Tax filing can be a complex task and you might need expert help.
Why do you need a Tax Strategy?
A professional tax consultant not only provides Tax Accounting services or helps in Tax planning
but can save millions of dollars over a lifetime. While the principal work of a tax advisor is to provide Tax Preparation Services, A professional will develop different strategies with the taxpayer to create permanent tax savings. A tax consultant can estimate clients’ future better than anyone. In short, To preserve wealth for the future, A taxpayer needs to save tax today and invest in the right investment strategy to get the maximum returns after retirement, with the help of a Tax Consultant. A tax consultant can be a Certified Public Account (CPA), tax attorneys or Enrolled Agent..
A Tax consultant can help you in different ways:-
1. Keep track of your financial Profit and loss
Your financial advisor helps you in analysing your financial situation to discuss and make crucial changes to your business, in order to save tax. Your financial advisor will keep an eye on your financial profit and loss accounts and keep a record to easily pass on to your accountant. Thus, saving a huge amount of your time. Every taxpayer needs to follow strict time limits in order to avoid penalties, To save your time, Your tax accounting consultant comes with premade financial records to make sure all returns are submitted within the given time limit. The tax penalty of late filing of tax in the United States of America is 5% of unpaid tax of that month and will continue costing you significantly every month. The penalty will not exceed 25% of your unpaid tax.
2. Maximize your Tax Savings
A professional tax advisor can make different tax saving strategies to maximize your savings, A tax advisor might advise you to contribute the maximum in 401(K) and 403(B). 401(k) allows you to lower your tax-paying income, For instance, every dollar, even a penny dollar you deposit in these accounts is not taxed until you withdraw the money and after retirement, you will no longer be drawing a salary, as a result, you will get a lower tax bracket. Additionally, Your tax advisor could suggest different tax saving plans like Roth IRA (Individual retirement account). Roth IRA allows you to withdraw the amount after retirement tax-free, while you may need to pay tax for depositing, it is still a good option as taxes in future are only going to increase. A tax consultant will take care of these strategies for you. While the above mentioned will be sufficient for most people but higher net worth and business owners will require a more advanced 1041 complex trust structure.
3. Help you determine the right investment strategy
Tax advisors can also be investment experts. Your financial tax advisor will work the day on and off to find not only the right investment strategy but will guide you through a tax-saving investment strategy that can limit your tax-liabilities such as Avoiding tax issues, tax-loss harvesting and offsetting gains with losses just a name of few. After considering your financial goals, a tax advisor can suggest investment strategies based on your risk profile. This way you can invest in the right strategy to get the maximum returns later.
4. Strategies in gifting throughout the year
Gifting some of your wealth to family members can reduce some of the estate tax liabilities. Your financial advisor can guide you through these gifting strategies which let you transfer some of your wealth without tax penalty. They can also advise and inform you about other charitable donations that will help reduce some tax burden.
5. IRS Credits
There are many IRS Credits out there that reduce tax. Here, Your tax payer’s education and experience make a huge impact. A taxpayer with no children and low income can receive up to $529, while other taxpayers can receive up to $6557 credits if they have three or more children. There are different types of IRS Credits such as American opportunity tax credit, Saver’s Credit and Child and Dependent Care Credit.
American opportunity tax credit offers $2500 per student. On the other hand, Saver’s credit is for individuals with retirement plans and have moderate to low income, Up to Half of their contribution to a plan can be received by these individuals. At last, Child and Dependent Care Credit offers up to 6000$ credit, depending on income.
A tax advisor can help you in building strategies and guide you through these Credits to reduce your tax burden.
Save Dollars Legally with Expert
There are numerous ways out there to reduce tax on savings and tax liability but it is very crucial to claim deductions within the borders of law and regulations, without the knowledge of Laws and regulation a taxpayer can fall deep in tax evasion, which is an illegal way to reduce tax, while on the other hand with the help of a tax consultant you can plan on tax avoidance strategies, which is a legal method to reduce tax. It is always good to hire someone with the knowledge of tax code. A tax advisor is a professional accountant and knows laws and regulations better than anyone. Moreover, A tax advisor will stay up to date regarding the latest tax reforms and changes. Effective tax saving plans in the U.S requires a Professional Tax Advisor who can furnish you with Futuristic Tax Saving Tips and strategies.
Who needs a Tax Consultant?
Any individual with higher income or income from various sources needs a Tax advisor, It is the most important decision you will make as a business owner or an individual. It is equally crucial for you to stay updated regarding the latest tax reforms other than just filling the tax returns and A professional Tax consultant can educate you the rules and reduce the chances of an audit.
If you have a complex tax life, which includes Stock options, Home office, retirement savings account and trust funds. It’s smart to consult a tax advisor. Even it is very important to consult a tax advisor when you experience life events such as when you get married or divorced, buy or sell a home, have or adopt a child. A financial tax consultant makes sure that your wealth will remain ideal and you won’t fall into illegal matters. Together CFO is a trusted and dependable Tax Consultant firm in Los Angeles with already saved millions of dollars for hundreds of clients. Only years of experience can help in ever-changing Tax brackets and you get this all with Together CFO. Get consulted today, contact the experts at +424-255-5848