Taxes can be stressful and expensive if you’re not 100% clear on what you’re doing. It’s important to hire the right accounting firm that can help you navigate the muddy tax waters to ensure you’re setting yourself up for success.
As you review your tax-planning strategies, here are two things you should know:
You Can Reduce or Eliminate Taxes
Sounds crazy, right? If you could eliminate taxes, why isn’t everyone doing this?
The answer: It takes work. And knowledge.
If you can find a way to take advantage of additional tax deductions, exemptions, or credits, it can be in your best interest. Sometimes you need an accounting firm to help identify these opportunities.
Where can you put your money to reduce or eliminate your tax burden?
- Municipal bonds, which may be exempt from federal, state and local income taxes.
- Investments that generate capital gains, such as growth stocks.
- Pro tip from our accounting firm in Las Vegas: Gains are not taxed until you sell the investment or hold them for more than a year, the latter of which will subject you to 15 to 20 percent capital gains taxes, depending on your income and filing status.
- Investments that pay qualified dividends, which are taxed at capital gains rates.
- The Gift of Giving
This one can be tricky, but when done right, you can transfer certain assets to someone who falls in a lower tax bracket. In most cases, you lose control of the asset you’re transferring, as the other individual becomes responsible for the associated taxes.
Here are a couple of examples:
- Tax-Free Gifts. In 2017, you can give up to $14,000 in tax-free gifts to any number of individuals. If the recipients generate income from your gifts, they’re responsible for the taxation on the earned income. You may give up to $28,000 in tax-free gifts if you’re splitting the sum between you and your spouse.
- Charitable Donations. For larger gifts, you can use your lifetime gift tax exclusion of up to $5.49 million (as of 2017).
Have Your Questions Answered by Our Accounting Firm in Las Vegas
At Fair, Anderson & Langerman, an accounting firm in Las Vegas, our CPAs work hard to stay current on the ever-changing tax laws. Learn more about our areas of expertise by contacting our office today or calling 702-870-7999.