Financial Planning
Growing your wealth is important in the early stages of your life.
Protecting your wealth is important after you have accumulated some wealth. Taking the time to understand your goals in life and how you feel about your money are important steps in helping you protect what you have.
Tax Planning
Three basic ways to reduce your taxes. Everyone pays taxes, but with proper planning your taxes can be reduced. To effectively reduce your taxes each year, you need a plan in place. Many choose to work with outside tax specialists who know the tax code inside and out. Others do their own research, managing their investments, doing their own tax returns, and ensuring that they are ready when April 15th rolls around. You should not pay more than you need to in taxes. After all, you can probably spend it better than the government.
1) Reduce your income. On a tax form, it comes down to your adjusted gross income (AGI), which is your income from all sources minus any adjustments. The higher your AGI, the more taxes you pay. The lower your AGI, the less taxes you pay. A good way to reduce your income is to contribute money to your retirement, such as through a 401(k) or similar retirement plan. Certain investments may also be used to legitimately reduce your income.
2) Increase your deductions. Taxable income is what's left over after you have reduced your AGI by your deductions and exemptions. Most tax payers can take a standard deduction, and some can itemize their deductions. Itemized deductions include expenses for health care, state and local taxes, personal property taxes (such as car registration fees), mortgage interest, gifts to charity, job-related expenses, tax preparation fees, and investment-related expenses. The three biggest Itemized deductions are mortgage interest, state taxes, and gifts to charities. One key tax planning strategy is to keep track of your itemized expenses throughout the year using a spreadsheet or personal finance program. You can then quickly compare your itemized expenses with your standard deduction. You should take the higher of the two.
3) Take Advantage of tax credits. There are thousands of potential tax credits. Knowing what credits are ligitimately available to you can really reduce your annual tax liability.
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-Kenneth Graham, Attorney