No one likes to be surprised with a staggering tax bill in April. A little planning can help you know what to expect or, better yet, help shrink that bill. If you are facing any kind of change in your income, expenses, or family size, your tax situation is likely to change, too. Whether or not we prepare your return, we can remove the anxiety from the unknown and structure these changes in the most tax-efficient way possible.
Tax planning comes in many sizes. For many people with income other than from wages, we assess the need for and amount of quarterly tax payments to help you avoid penalties for underpayment of estimated tax. For those clients with more variable income, we are available throughout the year to analyze your current situation and provide you with updated quarterly amounts or assist you in adjusting withholding.
Tax planning can be even more critical when you are making life-changing or business-altering decisions. On the sale of a farm, we were able to advise our client, prior to the sale, to separately allocate a portion of the sales price to the house and surrounding land. As a result, over half of the sales price was treated as a principal residence, and that portion of the gain was not taxable.
Large transactions like this are ripe for tax planning opportunities, but little can be done once the paperwork is signed. If you wait until March to discover the tax consequences of a deal you finalized the previous year, there is little your tax preparer can do to find tax savings.
Because we are a law firm, we deal with these critical decisions every day and because we provide tax services, we understand how these decisions impact your after-tax income. Even if we do not prepare your taxes, we can coordinate with your tax advisor and work as a team to develop the best results for you.