Tax Year Has Come and Gone Again For St. Louis Businesses
As the dust settles and clarity returns, a picture of the good the bad and the ugly of the past tax season surfaces.
You may be thinking, well, my taxable income was pretty high, but that means so was my tax liability. And I didn’t max out on either my medical expense or charitable contribution deductions this year. Bummer! That means that instead of helping out those children with autism, or standing with our sisters battling breast cancer, or saving the rain forest, I am just squandering my money and handing it over to Uncle Sam. Well, next year I’ll do better! This reflection (or a similar one) is one that many, many individuals have after they receive the results of their tax return. The solution is to work with professionals who know tax law inside and out.
Can spending money to save money really be the answer? Yes it can, provided you or your tax professional are knowledgeable in all aspects of the tax code and know how to correctly set up your books with respect to the prevailing tax law to exploit all the applicable opportunities available to you.
But there’s more involved, because a taxpayer’s overall personal or business profile is always the final, determining factor for which deductions are applicable, and financially advantageous. For example, in general mortgage interest is deductible, and this can be listed as an itemized deduction, or the standard IRS deduction of $6,300 can be taken, whichever is higher. But if you are married, filing separately, both spouses are required to file using the same method of deductions (standard vs. itemized), however the benefit only goes to one spouse. This action may actually be detrimental to the couple as a whole, so an alternative scenario would be to file jointly (as the standard deduction doubles), or at the very least, ask your tax professional to run a comparative analysis to determine which approach will yield the most benefit.
Here would be the place where we should put in a cheesy plug informing you that our firm offers St. Louis tax planning services where we set up a recommended strategy and workflow to maximize tax benefits and we will work with you throughout the year to accomplish those goals, but our best guess is that you already knew that!
The Volpe Consulting & Accounting Team