Most Americans don’t think about their income taxes much outside of filing their annual returns. However, those with significant wealth and assets usually perform tax planning throughout the year, taking advantage of laws and strategies that can lower their tax rates. No matter what your tax bracket is, there are ways to minimize the amount paid in taxes and allow you to retain more of your earnings.

What Is Income Tax Planning?

Income tax planning involves placing assets into structures that will allow them to minimize, defer, or avoid taxation. It may be done as part of creating an estate plan, during yearly financial planning, or both. Tax planning is a complicated affair that requires thorough knowledge of current and proposed tax laws, but if it is done correctly, it can make a Tax Planning Information With a Calculatorsignificant difference in your family’s financial security.

The estate planning attorneys at The Law Firm of Kavesh, Minor & Otis, Inc. recognize the impact that investments and business decisions can have on a person’s allowable income. As two of our attorneys have master’s degrees in tax law, we have a unique insight into the complex relationship between tax and earnings. We apply this knowledge to determine the right techniques to reduce taxable income for individuals, families, and business clients across Southern California.

We explore a variety of income tax planning strategies, allowing clients to minimize their tax liability through:

Stock planning.

Investments in the stock market are a common method of reducing tax liability. In most cases, stocks do not incur taxes while they are held—and if they are sold selectively, the taxes imposed may be lower than the rates on wage income. We can determine the proper portion of wage income that may be held in stock and advise you on how the future date of sale could impact your holdings.

Business structures.

If your portfolio includes several businesses or investments, it may be wise to create a management structure such as a limited liability company (LLC). As the manager of the business, you can oversee the company’s assets, real estate, and finances, while taking advantage of corporate tax incentives and business expense deductions.

Charitable donations.

Donations to non-profit organizations are tax-deductible. In fact, The Tax Cuts and Jobs Act of 2018 increased the allowable deduction from 50 percent to 60 percent of an individual’s adjusted gross income (AGI).

Real estate purchases.

Some real estate holdings may qualify for specialized tax deductions. For example, if you own an undeveloped plot of land, you may be able to work with land conservation trusts to create a conservation easement on the property (for protection of wildlife habitats or bird migration areas). The value of the easement can be claimed as a charitable deduction.

Defined-benefit plans.

Tax laws permit business owners to reduce their adjusted gross income by contributing to a 401(k), traditional IRA, or other retirement plan. If you are running a successful business, you may be able to set aside a substantial amount of tax-deferred money into your personal pension, reducing tax liability while investing in your retirement.

Return preparation.

Itemizing your deductions can allow you to discover (and take advantage of) any applicable tax credits that may be missed under a standard deduction. We work with trusted tax professionals to provide income tax planning and return preparation customized to our clients’ individual needs. A free consultation with them may be arranged by us, upon your request.

The earlier you start income tax planning, the more options you will have available to you. Our lawyers and counsel associates have a wide network of professional advisers to ensure that you are maximizing your assets that you can enjoy during your lifetime and then leave to your beneficiaries.

Our experienced legal team stays ahead of the curve on providing clients with advanced-level planning strategies, creating a comprehensive and customized plan that will give your family peace of mind. Contact us today to get started!

Do You Need To Speak With An Attorney About Estate Planning?

If you need to speak with an experienced estate planning lawyer please contact us online or call us directly at 800.756.5596 to first register for one of our free, informative seminars. Your attendance will qualify you for a special discount for our estate planning services should you decide to make a free appointment at the conclusion of the seminar and choose to proceed with us. We proudly serve clients throughout California with offices in Torrance, Newport Beach, Orange, Woodland Hills and Pasadena.

Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.