At TEPS LAW, LLC, we provide individuals, partnerships, and businesses with representation that enables them to minimize the amount of their income that is taxable while being compliant with all applicable laws and regulations. With an advanced taxation degree, Founder & Principal Melissa Wheaton is an attorney with the specialized knowledge and skill needed to assist you in accomplishing your goals of reducing your taxable income amount.
Strategies To Reduce Income Taxes
Fortunately for residents of the sunshine state, Florida does not withhold any income tax. However, this does not stop Uncle Sam from taking his share. In order to legally reduce the amount of income tax you pay to the federal government, there are a few strategies you can employ, including:
Retirement Account Contributions
Retirement account contributions are one of the best ways to reduce your taxable amount of income thereby reducing your federal income taxes. Traditional funds such as 401k’s and IRA can grow tax-free until you reach retirement age. These contributions can be viewed as tax write-offs and itemization is not required.
Health Savings Account (HSA) Investment
If you are eligible through your employer, contribute to an HSA. Investments in an HSA are made with pre-tax income. You may then withdraw the money, when needed, to pay for medical expenses. If the money is not taken out for healthcare costs, it can remain in the account and roll over year to year.
Deduct Medical Costs
If your unreimbursed allowable medical expenses are high enough, you may be able to itemize the expenses and claim a deduction.
Donate to Charity
Keep the receipts for any charitable donations you make throughout the year, including cash and goods. Should these contributions meet the federal threshold minimum, they may be used as deductions.
One of the initial decisions you will make when starting your business is what type of entity best suits your business needs. It can be quite a challenge to determine whether you should form an S-Corporation, a C-Corporation, an LLC, a Partnership or another business structure. Choosing the right legal structure for your business requires a thorough analysis of the financial status of the business as well as the tax implications, such as limited liability, one level of taxation, use of losses, characterization of losses, distributions, and applicable tax rates. We can advise you on formation issues, as well as provide assistance in incorporating your business and procuring the necessary licenses and permits.
Know Your Business Expenses
Certain business expenses, such as having a home office if self-employed, are deductible. Knowing what these expenses are, and the IRS’s current rules for taking the deduction is a matter you can discuss with your team at TEPS LAW.
Purchase A Home
There are tax advantages to homeownership. If you do not have a minimum of 20% equity in your home, it is highly probable that you have been required by your lender to pay private mortgage insurance (PMI). By itemizing the PMI you pay, it is possible to decrease the amount of federal income tax you are required to pay. There are also situations in which you may be able to deduct the interest paid on home equity lines and property taxes.
Defer Your Income
Deferring part of your income to next year is a good option if you expect to make less income in the following year. This may include participating in your employer’s deferred compensation plans or simply asking your employer to delay in paying your Christmas bonus until after January 1st.
Contact Our Firm For All Your Income Tax Planning Needs
Contact TEPS LAW, LLC today to speak with an attorney that understands income tax planning. You can contact us online or by calling 954-710-9400 to schedule an initial consultation. We now offer additional appointment options for your convenience. Contact us to schedule your virtual or telephonic initial consultation.