Everyone who lives and works in New York has to pay taxes, and of course, no one likes giving up some of their hard-earned cash. However, it’s possible to pay less in taxes or receive a larger refund at the end of the year. While paying taxes is inevitable, there are several ways to diminish your tax burden and end each year with more money. Proper tax planning makes it easier to build your personal finances, especially if you’re running a business in New York.
Take note that tax planning is different from tax preparation. Tax filing is simply preparing and sending in your tax return to the IRS by the deadline to ensure you are paying your taxes legally and correctly. Meanwhile, tax planning make sure that you are paying your responsible share of taxes and not a penny more.
By definition, tax planning involves analyzing your financial situation with the help of a tax planning attorney in NY, so you can minimize your tax liability.
Tax planning has many short-term and long-term benefits. Here are some reasons why you should be tax planning in NY:
Solving tax issues
The main short term benefit of tax planning is really having more money in your pocket after tax season. For the long term benefits, one of them is solving tax issues. If you owe back taxes or have other tax issues, planning can help you address these concerns and find a solution so your New York business keeps rolling in profits.
Saving for retirement
Saving for retirement may be a bit difficult in New York, especially after taxes. Luckily, many retirement savings options allow you to set money aside without paying taxes on that income. Once that money has been placed in a separate account, it can gain value based on interest or investments. This means, your retirement contributions can grow tax-free over time, resulting in a sizable nest egg for the future.
Taxes affect many parts of your life
If you’re asking, “When should I be tax planning?”, you should consider that it affects many parts of your life that you may forget to save. If you fail to consider the tax implications of a big financial decision, you could end up wasting a lot of money.
For example, the tax laws surrounding New York home sales can be particularly painful for uninformed buyers and sellers. By speaking with a professional before taking any financial action, you can prevent yourself from accidentally missing out on significant tax exemptions.
Helps in deciding between itemized or standard
In filing your taxes, you have the option to take the standard deduction given to all filers or to create a custom deduction by listing your expenses for the year. Either can give you better savings, depending on your financial situation in the past 12 months. With proper tax planning, you can make your financial life much easier by helping you choose which deductions suit you best.
Securing more for your heirs
With thoughtful tax planning, you’ll have more to pass on to your heirs and their eventual share of your New York estate. You can even go the extra mile by minimizing your heirs’ inheritance tax liability, so they can keep more of your lifetime earnings.
If you’re still wondering how to plan taxes in New York, you might want to avail the services of a tax planning company.
Plan ahead with Melanin Tax today
Melanin Tax Solutions is a tax planning company in New York that is steadfast in its commitment to provide tax and bookkeeping services to clients all over the country. Together, the team at Melanin Tax Solutions consisting of multiple tax planning attorneys in NY, are proud to say that they have a combined twelve years of experience in tax planning services and beyond. We also offer audit assistance, real estate tax services, and bookkeeping services to help our clients resolve any audit inquiries, reduce tax liability, and create an organized financial plan.
Melanin Tax Solutions cater to individuals, sole proprietors, partnerships, small businesses owners, and corporations in New York. Regardless of the size or nature of the clients, we handle each task with the same level of care and attention to detail to provide satisfactory results.