By making tax planning part of our clients’ overall business, personal, and retirement strategy, we can often help them minimize their tax liabilities. As things change in your business and in your life, we help you focus on your tax planning accordingly. If you would like to receive more information about our tax planning service, contact us today.
What is tax planning?
Tax planning is the key to using available tax strategies to reduce or postpone your tax liability legally. The more money you make, the more critical tax planning becomes. The tax code is complex and complicated — it is 70,000+ pages long and includes statutory code, regulations, and rulings that we accountants have to know. Therefore, planning for you means that we help you take advantage of the tax law provisions (about which we have to stay current), accelerating tax credits and deductions, and pre-planning applicable transactions with taxes in mind, whether it be for your business or your personal tax returns.
Cost Segregation Studies
Cost segregation continues to be one of the largest tax incentives for wealth preservation. A cost segregation study is a federal income tax tool that increases your near-term cash flow, in the form of a deferral, by utilizing shorter recovery periods to accelerate the return on capital from your investment in property. There are few investments that the United States Federal government allows investors to expense dollar for dollar. Real estate is that exception. You can deduct 100% of the purchase price against taxable income., allowing for a 50% return on investment at a 50% federal and state tax bracket.
Cost segregation enables the investor to mitigate tax liabilities and preserve wealth by accelerating these deductions much quicker. Ask O&S how we can help you with this.
Read some compelling Cost Segregation Studies on different property types at Engineered Tax Services.
R&D Tax Credit
Most U.S. states have the Research and Development Tax Credit, a permanent federal tax incentive meant to stimulate the manufacturing industry through innovation and technical design. While the R&D Tax Credit was available since 1981, tax regulations that were finalized in December 2003 significantly increased the types of activities that qualify for the credit.
Companies of all sizes and even different industries now qualify. You no longer need to develop a product or process that was new to the industry, only new to them. These dollar-for-dollar tax credits are for manufacturers, tool and die / job shops, plastic mold injection, software developers, architectural and engineering firms, construction contractors, food processors, chemical companies, agribusiness, and apparel/textile companies, among others.
Less than one-third of eligible companies realize they qualify for the R&D tax credit and even the companies that have taken the credits are not claiming everything they are fully entitled to. Take a closer look at this R&D Credits Overview developed by Engineered Tax Services.
Common tax saving strategies
- Timing of income, expenses, and asset acquisitions for both your company and family’s tax effects
- Retirement plans that you set up for your employees if you own your business, and for which you make maximum allowable contributions to these plans
- Section 529 plans (a tax-advantaged savings plan designed to encourage saving for future college costs)
- Estate planning for end-of-life decisions so that your heirs are protected from unnecessary taxes
Businesses have tax planning considerations each year including 1099 Reporting, highlighted in our recent blog: