As a business owner, income tax planning is crucial to your financial health regarding your business and your individual finances. Dealing with income taxes can become quite a challenge when balancing your personal finances with your business finances. It’s wise to work with an income tax planning service in Northern California specializing in personal and business tax planning. Here at J.R. Martin & Associates, we offer comprehensive tax planning services to small companies throughout Redding, CA, and the surrounding areas. The following are some of the income tax planning services that we provide:
An individual tax projection can be hugely beneficial to maintaining a healthy financial situation in the future. We will use your financial information to estimate what you will have to pay in taxes. We will gather data that includes your personal business income, other forms of income (such as from stocks or real estate), withholdings, retirement contributions, and anything else that you included on the previous year’s tax return that will apply to your upcoming tax return. Not only can you use this information to better budget your personal finances, but you can use it to identify ways to reduce your personal tax liabilities in the future.
A business tax projection is not dissimilar to an individual tax projection. Instead of estimating how much your personal taxes will be, a business tax projection helps estimate how much your business in Redding will owe in taxes. It’s critical that you calculate this number correctly, or else you could owe more than you thought and significantly hurt your cash flow. You may have to delay or accelerate future investments that you plan to make for your business. Our team can use all of your company’s present and past financial information to generate an accurate business tax projection that you can use to better plan and manage your company’s finances.
As a business owner, there’s a good chance that you’ll be looking to invest in various assets that will help spur the growth of your company over the long run. Such assets can include bigger office space, new equipment, or even additional inventory. Not only do you want to make sure that you’re in the financial position to be able to make those purchases, but you’ll want to understand the tax implications.
With our tax planning services, you can determine whether the purchase of assets in the future will be financially feasible (especially when taking into consideration what you will owe on taxes) and what those tax implications will be.
There are two significant risks when it comes to making business deductions. The first is taking a deduction that you cannot take, resulting in a tax penalty. The second is not taking a deduction that you could have taken, which means you’re essentially overpaying. Our team can comb through your company’s assets and financial records to identify all potential deductions, from business expenses and investments to asset depreciation and more.
As a business owner, you will likely qualify to claim a standard deduction on your personal tax return. Most people qualify for such a deduction. The other option you have is to itemize your deductions. You cannot do both on your personal tax return; however, you may be able to save more money if you itemize your deductions, which requires you to list each item you’re deducting in detail.
As a business owner, you could itemize deductions such as the cost of business cards or the cost of taking out potential investors, employees, partners, or clients to lunch or dinner to discuss business. We can help identify every expense that can qualify as an itemized deduction on your behalf so that you don’t have to go through a year’s worth of receipts. We can also help educate you about what can be deductible to be more organized and plan ahead.
Assets you’ve held for at least 12 months before selling at a profit are treated as capital gains. Anything sold within a shorter period is generally considered by the IRS as ordinary income and taxed at a standard rate. The capital gains tax is much lower than the standard tax rate; however, capital gains are treated differently based on how long you’ve held them. We can provide the necessary information you need about potential capital gains taxes, which can help you better plan the future sale of assets.
The research credit is meant to reward companies that pursue innovation. If you’re investing in research to improve existing products or to design and develop new products, you could qualify for a research credit. Not only can we determine whether your company qualifies for a research credit, but we can also help estimate how much of a credit you may be eligible to receive. We can do this by estimating your research expenses based on payroll records, your general ledger expense detail, your project lists, your project notes, and more.
Our tax planning experts can help you identify what tax bracket you fall in, which will allow us to calculate a more accurate estimate of your income tax. Based on the bracket you fall in, there are phaseouts in place that reduce your tax benefits. Being caught unaware of these phaseouts can result in a higher tax bill than you were expecting, which is why you must work with a professional service that has extensive knowledge on the subject — and that keeps up with all of the latest and upcoming changes to tax law.
As a small business owner in Redding, CA, income tax planning is critical to maintaining your financial security. Without proper income tax planning, you may pay more than you thought you’d owe, which could strain your personal finances as well as limit your company’s financial flexibility. Proper tax planning will help prevent you from being blindsided by the amount owed in taxes on a personal and business level. Here at J.R. Martin & Associates, we can provide you with customized tax strategies and tax planning to put you and your company in the best possible position to succeed by reducing your tax bill by as much as possible and by avoiding common tax return pitfalls.