We provide legal tax services
to individuals and businesses.
These services typically include tax preparation, tax planning and tax collections. They also include analysis of specific cases
where a tax component is included or a sub-area of the tax code is involved.
Tax planning is often conducted not only to understand all the ramifications of a situation, but to find ways to save on taxes.
The objective, in these cases is to conduct a tax-saving workout. But besides the saving objective there must be considered an implementing aspect.
Why business and individuals need planning ahead of time? Because many of these solutions must be implemented to work appropriately,
and that takes time.
A solution must be put in place.
And implementing often requires that low costs are met. This is a very important condition.
Savings must be commensurate with the effort to put all together.
Let's review some tax savings that easily comply with these conditions.
Some tax savings are simply incentives. Let"s say you are pondering if you will buy a car. If you are trying to save on
your tax bill it is opportune to know that there is a credit for electric vehicles (EV) up to $7,500.
If you buy a Tesla car you have that incentive. But this is not only for Teslas. All full-electric vehicles qualify for
the credit of $7,500. For instance, Chrysler Pacifica Hybrid, the Honda Clarity PHEV, the Cadillac CT6 PHEV qualify for the credit.
To benefit from the EV credit it is necessary to implement the strategy ahead of time. Cannot be done at the last minute
when you make an appointment with your accountant to prepare your taxes during tax season. Then, it is too late.
For instance, there is a quota. Each company has a limit of EVs that they can sell in one year with the tax credit attached.
After that limit the credit does not apply. Some companies reach that quota faster than others.
Also, there are conditions to receive the full amount of the credit. The taxpayer receiving the credit could qualify for
less that the total credit amount of $7,500. How much you get is determined by the battery capacity of the car you purchase,
measured in kilowatt-hours, and your tax situation. The credit is not associate with the price of the vehicle.
In this example we can appreciate another nice feature: some tax strategies are either free or almost free.
There isn't even a fee associated with requesting the credit. All it takes is to fill the form.
There are some large tax credits that take a lot of effort to request and to manage afterwards.
But here I want to give you a couple of examples of more accessible credit that apply to many people and are
not expensive or anything like that.
HELP TO PAY OR COST SHARING
There are many incentives and credits, applicable to many different types of situations.
There are tax credits associated to real estate, to retirement, to investments, to foreign income, to small business,
to medical expenses, and to many more situations.
Tax professionals dedicated to this area share a point of view that other similar professionals may not have.
They are looking to include what is not there already in the taxpayer affairs.
The most frequent approach to taxes is to try to optimize an existing situation. Tax planning rather focuses
on implementation of missing parts.
And in some cases, as I was mentioning before, the point is to find the incentives associated to some
individual's activity, project or business that are not being harnessed yet.
In some other cases, the tax credits adopt the form of cost sharing strategies. These tax credits that help
you pay for your business expenses.
One of these interesting tax credits is related to accessible workplaces.
Since the Americans with Disabilities Act (ADA) was enacted in 1990, employers have been required to make
their workplaces accessible to employees and customers with disabilities.
Since the cost of making these accommodations to your business can be expensive, the IRS allows small businesses
to deduct a portion of the cost of property and upgrades affecting it. The deductions, in this case, are a tax credit
for 50% of the allowable amount for eligible expenditures.
To determine if your small business qualifies, gross receipts need to be of less than $1 million for the preceding year,
or the business to have no more than 30 full-time employees.
You can receive the tax credit for improvements to your business which remove barriers, like making a restroom door wider,
and for new or modified equipment or devices to help disabled individuals. You may also be eligible for credit for interpreters
or means of helping a visually impaired employee.
Definitely, not a credit only for big players.
SAVINGS YOU ARE NOT TAKING REALLY HURT
All this becomes rather urgent when you find that you are paying taxes unnecessarily because you didn"t know there
is a tax credit you could use, or feasible changes that once implemented would put you in a position to use a tax credit.
That's when not doing tax planning hurts.
Let's take the residential energy credit called Nonbusiness Energy Property Credit.
You qualify for this credit if during year 2019 you made energy saving improvements to your new or existing home.
Residential renewable-energy tax credits may provide a credit up to 30% of the cost of solar panels that generate
electricity, solar-powered water heaters, wind turbines that generate energy, geothermal heat pumps, fuel cells that
generate electricity-generating efficiency.
But some things are easy to miss. For instance, the definition of a home includes a house, houseboat, mobile home,
cooperative apartment, condominium and sometimes a manufactured home.
This credit requires that you are a little proactive as it counts after the improvements are finished. Other restrictions
apply. For example, you can claim a credit for your solar water heater only if the property is certified by the nonprofit
Solar Rating Certification Corporation or by a comparable entity.
CALL US FOR A FREE ANALYSIS
Our experience is that a great number of tax situations can be improved by implementing solutions that would bring tax savings.
From the self-employed independent contractor to the landlord, to the owner of a small business, or even for
someone saving for retirement, all these situations may be improved.
The first thing that we need is to sit with you to analyze your tax situation.
If you want to know our opinion on your situation, call us.
We will go over your tax situation free of charge and will let you know our ideas.