You have probably been hearing a lot of talk about possible tax law changes lately. Considering all the changes that we’ve had over the last two years, this year may be as important as ever for good tax planning, especially with the likelihood of future tax rates increasing. While we don’t currently know what the specific changes will entail, we can get a head start to tackle 2021 tax planning, and to make sure we’re ready to implement any changes as final details emerge.
Tax planning is the process of managing your financial plan with the goal of reducing your tax liability, and safeguarding assets at the federal and state level. Most tax planning involves deductions, credits, and current vs. future tax rates. When tax planning, you should be looking for strategic and legal ways to reduce your tax burden now and for years to come.
Anyone can benefit from proper tax planning, but those with more complex situations – business owners and those who have accumulated wealth – could benefit the most.
Tax planning is strategic, thoughtful, and goes well beyond the scope of tax preparation. Find a good CPA who is experienced in working with diverse clients, business owners, and unique situations to help you properly prepare for the upcoming tax season.
Some Things to Think About When Tax Planning:
- Standard vs. Itemized Deductions
- Charitable Gifting
- SALT Limitations
- Medical Expenses
- Education Savings
- Capital Gains & Losses
- Child and Dependent Care
- Advanced Child Tax Credit
- Contributions to Retirement Plans
- ROTH Conversions
- Record Keeping and Substantiation Requirements
- Gift Tax Consequences
- Medicare Premiums
- Reasonable Compensation (S Corp owners)
- Executive Compensation Packages
- Maximizing 20% QBI Deduction
- Revenue Recognition or Deferral
- Net Operating Losses
- Tax / Entity Structure
- Paycheck Protection Program
- Employee Retention Tax Credit
- If you would like to get a head start on tax planning for 2021, would like more information, or have any questions, we’re here to help.
Senter CPA: An Extension of Your Team
Our goal is to be a part of your team, help save tax dollars, and achieve your goals. We are your trusted advisors right here in Clarkston, Michigan. If you are interested in discussing tax planning opportunities, please give us a call at 248-934-0550 or click the contact us button below. We look forward to hearing from you.