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Hello Wealth Builders!

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I always say there are levels to building a business and saving on taxes. Too many times I've been approached by people who just want the secret sauce to paying little to no taxes, or don't take the time to understand how income works.

I wanted to share 10 things that my most successful clients did and are doing to ensure they are handling their business correctly and paying the least amount in taxes:

• Understanding Tax Brackets: How progressive tax systems work and the impact of different income levels on taxes owed.

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• Types of Income: Differentiating between earned income, passive income, and portfolio income, and their respective tax treatments. Different types of income are tax differently.

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• Standard vs. Itemized Deductions: Basics of standard deductions and itemized deductions, and when to choose one over the other.

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• Tax Credits vs. Tax Deductions: Understanding the difference between tax credits (which reduce tax liability dollar-for-dollar) and deductions (which reduce taxable income).

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• Basic Tax Forms: Familiarity with key tax forms like the 1040, W-2, 1099, and K-1s, and what information they provide.

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• Filing Status: The impact of different filing statuses (single, married filing jointly, married filing separately, head of household, qualifying widow(er)) on tax calculations.

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• Adjustments to Income: Knowledge of common adjustments to income (above-the-line deductions) that can lower taxable income, such as contributions to retirement accounts and student loan interest.

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• Dependents: Who qualifies as a dependent and how claiming dependents can affect tax liability.

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• Tax Deadlines and Penalties: Key tax deadlines and the penalties for late filing or late payment.

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• Record Keeping: The importance of maintaining accurate records and receipts for income, expenses, and deductions. We can't do any type of planning without proper financial records.

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When you begin to understand the basics, you can begin to proactively plan to pay the least amount in taxes. It takes work, time, and a partnership with a great tax strategist.

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A FEW IMPORTANT REMINDERS:

September 15th

• Individuals and C Corporations - Internal deadline in order to meet the Federal tax deadlines:
• 3rd Quarter estimated tax payments
• S Corporation and Partnership returns

October 15th

• Individual and Corporation returns

December 31st

• Last day to file your Beneficial Ownership Report if you established a business/LLC prior to January 1, 2024. Please click on the link for additional information.

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We are accepting new clients. Please feel free to select the call that best describes your needs.

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Tax filing is a one time event, but successful tax planning happens year 'round.