by yafco | May 11, 2023 | Uncategorized
Are you a high-net-worth individual? Then you’ll probably be aware that your tax planning needs are slightly different from the average person’s. Because you’re on a higher income and have a more complicated financial situation, implementing a tax plan is essential to minimize your tax liability and maximize your capital.
In this guide, we’ll dive into the significance of tax planning for high-net-worth individuals and how our personal tax accountant in NYC can assist in achieving your financial objectives.
Why tax planning is paramount for high-net-worth individuals
As a high-net-worth person, your tax situation is more complex than the average individual’s. As such, you may have numerous sources of income, assets, and investments that need consideration when it comes to preparing your tax return. If you don’t have a clear plan, you’ll likely end up paying more taxes than necessary, meaning your capital will be eaten up in time.
So, you need to examine your financial situation and figure out a strategy to reduce your tax liability while exploiting your financial objectives. Did you know? If you take advantage of your tax credits, deductions, and other tax-saving strategies, you’ll be able to keep more of your hard-earned cash in your wallet.
How an individual tax accountant can help
Tax planning is a strenuous, intricate process, particularly for high-net-worth individuals. Thankfully, this is where an individual tax accountant comes into the picture. They’re experts who specialize in assisting high-net-worth individuals with their tax planning requirements. An individual tax accountant has the know-how and understanding to navigate the intricacies of the tax code and devise a tax plan tailored to your distinctive financial circumstances. Ahad&Co has individual tax accountants handling NYC tax planning who can always help you.
Here’s how an individual tax accountant can help you with your tax planning:
Put together a complete tax strategy
Your individual tax accountant can help you put together a comprehensive tax plan that considers all aspects of your monetary situation. From developing a plan to reduce your tax liability and identifying possible tax-saving opportunities to assessing your investments, assets, and income, you’ll be in great hands.
Maximize tax credits and deductions
As a high-net-worth individual, you can take advantage of innumerable deductions and tax credits to help cut down your tax liability. By hiring an individual tax accountant, they’ll be able to pinpoint these deductions and credits to guarantee you’re reaping the full rewards.
An individual tax accountant can help you determine these credits and deductions and ensure that you utilize them to the fullest.
Retirement planning
Planning for retirement is integral to tax planning for high-net-worth individuals. Luckily, an individual tax accountant can create a retirement plan that considers your long-term financial objectives and existing financial situation.
Not only will they help you boost your retirement savings, but they’ll also help you take advantage of tax-advantaged retirement accounts.
Get guidance through complex tax issues
A high-net-worth individual may often come face-to-face with tax difficulties, like international tax problems, gift taxes, and estate planning. Thankfully, an individual tax accountant has the prowess and professionalism to walk you through troublesome matters so you’re fully compliant with every pertinent tax law. Ahad&Co’s individual tax accountants can guide you through the ins and outs of personal taxes in NYC.
Offer continuing tax planning and assistance
Tax planning doesn’t just come around once a year – it’s a constant process. An individual tax accountant will offer continuous support and tax planning advice to make sure your tax plan stays current and in line with your financial objectives.
Tips and tricks for high net-worth individuals
To help you increase your tax savings and hit your monetary targets, we’ve pulled together a few tips and tricks for high-net-worth individuals:
Begin ahead of time
To ensure you have plenty of time to apply tax-saving strategies before the year comes to an end, begin your tax planning early in the year. The sooner you start planning, the more time you have to leverage tax-saving opportunities.
Maintain orderliness
Because you’ll have tons of financial records and papers to keep track of, you need to stay organized. Keep investment statements, tax returns, and other essential documents orderly and in one place. In doing so, you’ll be able to effortlessly access all your forms when you need to submit a tax return or make other financial choices.
Optimize contributions for retirement
And another thing. You’ll want to maximize insurance contributions as part of your tax planning strategy. Retirement accounts like IRAs and 401(k)s provide considerable tax benefits, so contributing the correct amount will assist in lessening your taxable income.
Let’s say you’re a high net-worth individual. You want to enhance your contributions for retirement. In 2021, you could reserve up to $6,000 in an IRA and $19,500 in a 401(k). And if you’re over 50, you could make extra catch-up offerings of $6,500 to your 401(k) and $1,000 to your IRA. That’s a whole lot of savings to keep your future looking sunny and bright.
Give back while giving yourself a break on taxes
Charitable giving is an excellent way to make a difference while lessening tax accountability. If you donate to an authorized charitable association, you’ll be able to subtract the donation sum from your taxable income. That means less money goes to the government and more goes towards a great cause.
And let’s not forget the other game-changing charitable giving strategy you can consider, known as a donor-advised fund (DAF).
A DAF allows you to donate assets, like stocks, cash, or real estate to the fund, obtain an instant tax deduction and suggests charity grants over time. Making charitable donations means you make a lasting impact on the causes you’re passionate about while also enjoying tax benefits.
Ascertaining the most effective charitable giving strategies for your financial objectives isn’t an easy thing to do alone, which is where an individual tax accountant comes in. They help you understand the tax benefits of various charitable giving options and navigate toward the appropriate possibilities for your unique circumstances.
Evaluate and fine-tune your plan often
Fortunately, you don’t have to do it on your own. If you work with an individual tax accountant, you can remain ahead of any fluctuations that may influence your tax planning plan. Individual tax accountants, such as our trusted professionals in NYC tax planning, ensure your plan is still effective in maximizing your savings, decreasing tax liability, and hitting your long-standing economic targets.
Moreover, your bookkeeper can also give you a behind-the-scenes look at the latest tax regulations or laws that may impact your strategy. So, you’ll stay ahead of the curve and make any compulsory alterations in advance.
The takeaway
In short, tax planning is a critical aspect of financial planning for high-net-worth individuals. While it may seem slightly overwhelming, if you follow these steps and partner with a veteran individual tax accountant like the ones we have at Ahad & Co, you can breeze through tax season and accomplish financial peace of mind.
So, are you ready to take control of your tax planning? Speak to us today to schedule a consultation.
by yafco | May 4, 2023 | Uncategorized
A recent study revealed that some of the main reasons why small businesses collapse are because they lose focus and run out of cash, and experience cost and pricing problems. Taking care of your finances is one of the most essential aspects of running a flourishing small business.
To keep tabs on your income and expenses, you need to have a budget in place. While creating and maintaining a budget may seem intimidating, with the right guidance, it can be a straightforward, rewarding process. As a firm with notable experience in business consulting in NYC, we’ll walk you through the steps in creating and maintaining a budget for your small business.
Why create a budget for your small business?
As a small business owner, you must have a solid understanding of your finances. The budget you create for your small business is a financial roadmap outlining your projected income and expenses across a set period (typically one year). Your budget enables you to prepare in advance, manage expenditures, track financial progress, obtain funding, and budget for emergencies.
Prepare in advance
Devising a budget enables you to prepare in advance for your business activities. When you know all about your expected expenses and income, you’ll be able to plan your business activities appropriately. For instance, you may have a hefty outlay in the pipeline, like a large order to fill or a new piece of equipment. So, you can plan to ensure you have the correct funds to hand when you need them.
Manage expenses
Once your budget is in place, it’s easy to manage your expenses and not overspend, which is a common issue experienced by numerous small businesses. If you overspend, this leads to financial headaches, like debt and cash flow problems. Having a budget allows you to keep track of your expenditures so you only spend what you can afford.
Track financial progress
Tracking your financial progress is crucial for making your small business a success. Sticking to a budget means you can compare your financial performance with your budget and tweak it accordingly.
For example, if you discover that you’re spending more than you anticipated, identify areas in which you must cut back to enhance your financial progress.
Budget for emergencies
Unforeseen expenditures can strike at any moment and substantially drain your small business finances. If you have a budget ready, you can reserve capital for unanticipated outlays, like emergencies or equipment repairs. Doing so ensures that your business can deal with any surprise costs that may occur without triggering financial pressure.
Obtain funding
Having an established budget tells impending lenders you have a clear financial plan set up. So, it’s simpler to obtain funding should you need it, meaning more chance of lenders lending money to you because you have a rock-solid financial plan. It says that your small business is financially stable and that there’s a good chance you’ll be able to repay the loan.
The steps involved in creating a budget for a small business
While crafting a budget for your small business may seem a little unnerving, it’s simple. Take a look at these steps, and you’ll create a solid budget for your small business easily.
Step 1: Pinpoint your sources of revenue
First up, identify your income streams. That is to say, understand where your earnings come from. These may include services, sales, or investments. To work out your revenue for the next year, use historical data. For instance, if your small business generated $100,000 in revenue, you can expect to generate $110,000 this year.
Step 2: Calculate your costs
Next, forecast your outlays – these are the funds related to managing your small business, like utilities, rent, and supplies. To work this out, base your expense estimates on past performance to work out your expenses for the following year. So, if your rent was $30,000 last year, it may be roughly $32,000 this year.
Step 3: Determine your bottom-line
To figure out your net earnings, subtract your estimated expenses from your calculated revenue. Your profit is your revenue, excluding your expenditures. This figure tells you how much cash your business is predicted to make once all overheads have been paid. So, if your projected income is $110,000, and your anticipated outlays are $80,000, your net income would be $30,000.
Step 4: Define targets
Establish objectives for your business in line with your net income. These can be long-term or short-term targets and can be non-monetary or monetary. For instance, you could set an objective to recruit three new employees or boost your net income by 15% in the next year.
Step 5: Keep tabs on your progress
Monitor your performance often to make sure you’re on target to achieve your objectives. Revise your budget frequently to indicate any changes in your business, like a rise in revenue or an unanticipated outlay.
How our business advisory consulting and small business accounting solutions can help
Creating and maintaining a budget for your small business can be a laborious affair, particularly if you aren’t acquainted with financial planning. Happily, we, here at Ahad & Co, offer small businesses the best CPA services in NYC that can help you create a budget, monitor your capital, and make well-versed financial choices.
Business advisory consulting
Our business advisory consulting services will enable you to make knowledgeable financial assessments for your small business. We provide professional guidance on risk management, cash flow management, and financial planning. With the help of our team delivering small business consulting in NYC, you’ll create a budget that aligns with your business objectives and guarantees lasting financial solidity.
Small business accounting solutions
At Ahad & Co, we deliver small business accounting solutions to help aid you in keeping tabs on your money matters and ensure that your budget is current. From bookkeeping and payroll management to financial reporting and tax preparation, our CPA in NYC got you covered. If you outsource your accounting needs to us here at Ahad & Co, you’ll have more time to concentrate on running your business while we handle the financial side of things.
The takeaway
Creating and maintaining a budget helps you stay on top of things, control your spending, and plan and prepare for any financial emergencies that may come your way. What’s more, it helps you secure financing, which is never a bad thing.
Happily, creating a budget isn’t rocket science. It’s relatively simple – just estimate your expenses and revenue and set a few objectives. And the good news? We have your back. With our small business accounting solutions and business advisory consulting, creating a budget that aligns with your business objectives and ensures long-term stability’s a walk in the park. Talk to us today.
by yafco | Apr 25, 2023 | Uncategorized
As an employer, it’s up to you to pay and report federal and state taxes for your business and workers. To ensure you’re following correct tax laws, be sure to record all the relevant tax deductions and deadlines.
As a business owner, you must be able to work out and withhold taxes from your employees’ paychecks and remit those taxes to the appropriate government agencies.
Being a trusted provider of CPA services in NYC, we wrote a guide about payroll taxes to help employers out there. Read on to learn about payroll taxes, how to work them out, types of deductions, your obligations as an employer, and who to hire to help with your taxes.
What are payroll taxes?
Payroll taxes are taxes you withhold from your workers’ wages and submit to the government on their behalf. You, as the employer, are accountable for instigating a payroll practice that obeys tax regulations, works out how much to subtract from your workers’ paychecks, credits the right amount of US tax dollars before the deadline, and offers quarterly statements about these tax withholdings.
Formulas to work out net pay and gross pay
Gross pay is the total amount a worker earns before any taxes or deductions are taken out. In other words, it’s the salary you offer a candidate when you onboard them initially. The final amount, post-tax deductions, is the net pay – also called take-home pay. You can calculate the gross pay using the below formula:
Pay rate multiplied by hours worked = gross pay.
If you want to calculate net pay, use this formula:
Gross pay minus payroll tax deductions minus voluntary payroll deductions = net pay.
Payroll deduction types
To understand how much you must deduct from your employees’ salaries every payday period, you need to be aware of every payment you have to make on their taxes. There are two key types of payroll deductions:
Voluntary Deductions
These are deductions your employee selects to have taken out of their salary, for example, health insurance premiums, charitable donations, or retirement plan contributions. Typically, the employee must approve these deductions.
Involuntary Deductions
Involuntary deductions are withdrawals that you (the business owner) are legally obliged to subtract from your worker’s paycheck, including state income taxes, wage garnishments, federal and state income taxes, Medicare tax, and Social Security tax. These deductions are a prerequisite and are demanded by federal or state law or court order.
Employers’ Payroll Responsibilities
As an employer, you must complete various tasks to make sure you’re paying the right amount of taxes and following payroll tax regulations. These duties include:
- Calculating the amount of income tax to deduct from your worker’s paycheck.
- Depositing tax dollars for your employee.
- Paying your portion of payroll taxes.
- Arranging reports for Payable and Receivables Reconciliation.
- Submitting the payroll tax returns.
- Utilizing financial reporting to clarify your payroll expenditures.
- Implementing a fixed employee taxes deposit schedule.
- Filing yearly reports to the Social Security Administration and your workers about employee tax payments.
- Generating quarterly reports concerning taxes you deducted and credited.
Who can help with your payroll taxes?
Paying taxes is usually a laborious, overwhelming process. Happily, there are fully-trained workers ready to take care of your payroll duties on your behalf.
Payroll professional
Payroll professionals assist in helping an expanding business manage most of its payments. Here at Ahad & Co, we process business taxes in NYC and help you navigate the IRS tax code effortlessly. We’ll take away your accounting headaches and fill all payroll records, offer complete tax planning services and consultations, and advise on setting up a new business tax structure.
Payroll clerk
A payroll clerk manages payments by establishing timesheets to ensure they’re paid punctually. Usual duties include:
- Detailing payroll numbers in your organization’s payroll software.
- Deducting staff tax amounts and formulating and allocating manual checks to staff.
- Logging and describing staff payment issues to the HR executive.
When you’re looking for payroll clerk applicants, they’ll need excellent data entry skills and must be able to enter payment and timesheet data accurately.
Payroll director
A payroll director, otherwise known as a payroll manager, helps your admin employees and frequently handles your workers and their payroll. Duties include managing state, federal, and other compulsory tax payments, supervising the complete payroll process, and gathering data concerning which voluntary deductions staff wish to opt in to.
It’s best to recruit a payroll manager when you have a mix of employees who are paid hourly or on a yearly salary and staff based in various states. To help you ascertain the right person for this position, source applicants with good time-management and productivity skillsets.
What type of tax is payroll tax?
Payroll tax is a tax type that business owners must pay to the government based on their workers’ salaries and earnings. These are normally split into two sections:
Medicare tax: This tax type finances the Medicare program. It offers healthcare advantages to eligible people and is 1.45% of the worker’s gross pay without any limit.
Social Security tax: This kind of tax finances the Social Security program, providing disability, retirement, and survivor benefits to suitable individuals, and is 6.2% of a worker’s gross pay (up to a specific limit).
How to calculate payroll taxes
To calculate how much to pay for payroll taxes, you need the below forms:
- State W-4
- W-4: Employee’s withholding certificate
- 1-9: Employment Eligibility Verification
- Direct Deposit Authorization
These documents will assist in working out how much to subtract from workers’ taxes. Deduct voluntary and mandatory withdrawals from your gross pay to calculate your final payroll tax sum.
Why does payroll tax exist?
Payroll taxes help American residents financially. If you’re paying federal payroll taxes, these finances go toward social insurance plans such as Social Security and Medicare.
The majority of local and state income taxes fund public expenses such as health care services, education, public employee wages, city construction, local parks, as well as other profitable development endeavors.
Final thoughts
Take your time working out your organization’s payroll taxes so that you know you’re deducting the correct amount from workers’ salaries. Hiring a tax professional, such as Ahad&Co ‘s accountant in NYC, to help oversee your payroll tax can be beneficial, as they offer professional knowledge to ensure you stay compliant with tax regulations and laws.
Also, availing business tax services is time-saving. Our business tax accountant in NYC calculates your payroll taxes, fills out tax forms and stays on top of tax deadlines so you don’t have to. Hiring a professional gives you peace of mind, saves time and money, and guarantees you comply with all tax regulations and laws.
by yafco | Apr 19, 2023 | Uncategorized
Taxes can be nerve-wracking if you’re a small business owner. Chances are, you wear numerous hats, so the last thing you want to worry about is handing over more of your hard-earned business revenue to the government. Happily, there’s a multitude of tax-saving strategies to diminish your taxable income this year.
Tax planning is a paramount part of running a prosperous business. Carry on reading for ways to minimize your small business taxes each year.
Hire a trustworthy CPA
At Ahad & Co., our business tax accountant in NYC (CPAs) is reputable and verified. Business taxes involve a whole host of complexities and rules. The last thing you want is to risk bypassing something critical in terms of your taxable account. There’s the potential you could write off a qualifying childcare expense or tap into health savings.
At Ahad & Co, we handle your convoluted tax affairs – our CPA services in NYC offer a free consultation to establish whether we’re the partner you need at your side. We’ll put a strategy in place to sort your taxes correctly, whatever your financial circumstances. As well as making sure you’re paying all that’s due, there are various write-offs you probably aren’t aware of that may reduce your tax bill. The bottom line? CPAs don’t cost you money. They save you money.
Take advantage of Startup deductions
If you only just launched your small business in the past year, you can get your hands on several deductions accessible only to help new companies navigate costly start-up fees. If your overall start-up fees were below $50K, you can deduct a maximum of $5K in start-up fees and another $5K in organization costs.
You can also use a fractional deduction reduced by overage if you spent between $50K and $55K.
Optimize your retirement plan contributions
Utilizing the correct retirement plan will enable the greatest pre-tax contributions. Higher contributions mean higher tax deductions, meaning a lower total tax bill.
The plan you set up the previous year may not be appropriate for your business as it stands now. If you’re a business owner on a seven-figure income still using a Traditional IRA, it’s time to reassess. Even though you have a current 401(k) plan, there’s a chance you may benefit from tweaking the plan to make sure you make the maximum contribution annually. If you need any help in optimizing your retirement plan contributions, contact our team handling the NYC tax planning for assistance.
Deduct your automobile
Small business owners can write off the complete cost of vehicles weighing more than 6,000 pounds, such as light trucks or sedans. In this case, you may be able to write off up to $18,000. But your vehicle must only be used for business-related purposes. Yet, if you use the van or truck half for business reasons and half for personal use, you can take off 50% of the amount.
Account for business losses
Recording business losses is an excellent way to cut your annual taxable expenses. Business losses can be subtracted from revenue, in many situations reducing your company’s total taxable income by hundreds of dollars. Ultimately, this saves you way more money than simply making deductions for things that may be deemed personal, like charitable contributions or home mortgage interest.
Use the correct business entity
Employing the correct business entity for your business industry could drastically enhance your company’s tax efficiency. The majority of business entities have advantages and disadvantages (S-Corp, Sole Proprietor, Partnership, LLC). Contact your local Bronx accounting services to confirm you’re using the right business structure for your company.
Keep up to date on small business tax law changes
If you’re working alongside an accounting pro who specializes in CPA and tax planning (or another tax expert), they will aid in keeping you ahead of the applicable tax law changes that may impact your organization.
While you don’t have to be a tax expert, you need to keep an eye on the headlines about major tax bills or revised tax laws to see how they affect your tax liabilities.
Arrange your small business as a Limited Liability Company (LLC)
If you re-structure your small company as a Limited Liability Company (LLC), you benefit from tax advantages, like the pass-through. Essentially, your business revenue gets passed to you, the owner, and then taxed on a personal income tax rate. What’s more, you save on Social Security and Medicare taxes, plus evade double taxation.
Keep tabs on your travel expenses
You can deduct more than airplane tickets and mileage for your travel costs. Numerous business owners are increasing travel again to revitalize their businesses and broaden their industry knowledge. Luckily, you can wipe out most of your travel expenses so long as the sole purpose of your journey is connected to the business. In addition to airplane tickets, railbus trips, ferries, and car journeys (to and from the airport) are also allowable.
Meals and lodgings are allowable, but they have to be business-related. Accommodation is entirely deductible, as are business meals provided by diners. Nevertheless, nothing is allowable if it’s a vacation in disguise. So, ensure you track your travel expenses so you’ll be able to support your claims should the IRS question them.
Recruit family members to work in your small business
If you want to cut your taxes, appoint family and relatives. The IRS allows a range of options. Did you know? You can even hire your children to safeguard your revenue from taxes. Income paid to your offspring has a lower marginal value. Occasionally, tax is completely disregarded. Should your business be sold under proprietary, your child’s earnings are excused from social security and Medicare taxes. Double-check the wages are acceptable for business purposes. And meanwhile, recruiting a partner cuts taxes, as the earnings won’t be exposed to the Federal Unemployment Tax Act (FUTA). If you like to explore any of these opportunities for your business, get in touch with Ahad&Co’s business consulting in NYC.
Final thoughts
With a little sensible planning, you’ll be able to cut your taxable revenue as a small business owner so that you get more money working for you. Just don’t forget to take advantage of our Bronx accounting services to ensure you qualify for the possible savings mentioned here.
Ahad & Co works with a whole raft of customers to fulfill their needs – reach out today if you think we’d be a suitable partner.
by yafco | Apr 19, 2023 | Uncategorized
Navigating the intricate world of estate and trust taxation can be daunting. With regulations moving forward all the time, securing your assets for future generations can feel like crossing a minefield.
All it takes is understanding the basics and implementing some tax-efficient strategies to ensure you’re minimizing your tax liability and defining your legacy for your loved ones.
We’ve got some explainers on how trusts and estates can be taxed, and how you can reduce the overall tax burden to preserve your hard-earned wealth.
Keep reading.
How estates and trusts are taxed
To understand how to get the most out of estate planning, you need to understand the tax rates for estates and trusts. Here’s the lowdown on estate and trust taxes.
Estates
Some estates are subject to federal and state estate taxes when someone who’s passed away’s assets transfer to their spouse or heirs. Most estates have tax-free exemptions as estate tax levies on estates worth more than $12.92 million, or $25.84 million for married couples.
For estates that hit this threshold, the federal tax rates can hit up to 40% depending on deductions and estate planning measures. Some states will have an additional tax rate, so check your local laws to determine whether this is true. If you are in New York, get in touch with our personal tax accountant in NYC for assistance.
Trusts
There are two main categories of trusts in the US: grantor and non-grantor. With a grantor trust, the creator (or the grantor) is treated as the owner for tax purposes. That person is then responsible for reporting the trust’s incomings and outgoings on their own personal tax return.
With a non-grantor trust, the owner doesn’t keep control over the trust’s assets and the trust files its own tax return as it’s a separate legal entity. The trust may need to pay income tax on its income, as would any beneficiaries on any income they get from it.
Trusts can be tax-efficient to reduce estate tax by transferring assets into them, reducing the overall tax liability. It’s always best to consult a professional on these matters to ensure you’re on the right path.
Steps to minimize your tax liability
Gift tax exclusions
You can give a certain amount of money tax-free to loved ones, also known as gifting. Each married couple member has their own allowance, potentially doubling your tax-free gifting threshold.
It’s important to monitor the limits, as they change often. For 2022, the exemption limit was $16,000 per person, so $32,000 for a couple. This tax-free way of intergenerational wealth transfer can significantly save on tax in the long run.
Use spousal deduction
If you’re married you can leave an unlimited amount of assets to your spouse free of tax, which can be used as an estate planning method. The exception is if the spouse isn’t a US citizen.
Married couples can also take advantage of portability, where the surviving spouse can use the deceased’s remaining unused estate tax exemption. This can further reduce the overall tax burden, but it’s always worth consulting an expert on the logistics first.
Family offices
A family limited partnership (FLP) could be a useful estate planning tool if your family has multiple business interests. Several benefits include potential discounted asset valuation, control over asset management and indirect income tax advantages.
The IRS looks closely at family limited partnerships to ensure they’re not a tool for tax avoidance, so it’s especially important to keep all records up to date and potentially hire an expert, such as our CPA in NYC, to ensure everything for the FLP is compliant.
Generation-skipping transfer tax (GSTT) planning
If you want to leave some of your estate to your children, you may be subject to GSTT which can be up to 40%. The exemption threshold is currently $12.92 million per person (double for married couples).
Trusts can help minimize GSTT liability by allocating assets to beneficiaries tax-efficiently. An irrevocable trust structure like a dynasty trust could be used as it shields the assets from GSTT, allowing you to pass on wealth to grandchildren without the hefty tax penalties.
Donate to charity
Many people donate to charities as part of their estate planning strategy to define their legacy and reduce their overall tax liability. This is because charitable bequests made in a will are exempt from federal taxes, reducing the value of the overall estate and therefore the amount of tax paid on it.
There are several ways of going about this, such as a one-off outright gift, charitable trusts or setting up a private foundation that can bring income tax deductions into the mix. Working with a professional to help you with the numerous charitable giving options would be tailored to your unique needs.
Consult an expert
Every estate is different and making the most of tax-saving benefits can be a tricky maze to navigate. To ensure your estate plan is tailored to your specific needs and compliant with all applicable laws, speaking with an individual tax professional is essential.
An expert can help you design an estate planning strategy based on your assets, update the plan should anything change and guide you through the system’s complexities.
Review your plan regularly
Regular reviews of your estate planning are vital for two reasons: estate tax laws can change often, and your financial situation may also change in the future. Should your wealth grow, your estate planning needs will also become increasingly complicated.
Reviewing your plan annually and making necessary updates ensures it’s always current and optimized to minimize the tax burden.
Wrapping up
By taking a proactive approach to estate and trust tax planning, you can minimize your tax liability and create a lasting legacy that reflects your values and supports the people and causes you care about most. In New York, you can count on our team involved in NYC tax planning to take care of these matters.
With the right guidance and a full estate planning strategy, you can get peace of mind knowing your assets will pass on to your loved ones. Ahad & Co can be your partner in ensuring your assets are protected – our tax preparer in NYC provides expert advice on all sizes of estates. Get in touch today to find out more.
