With the new tax law going into effect next year it is important for individuals and businesses to start planning their futures and ensuring they are setup in ways to utilize all the benefits the new tax law has to offer. That is why Taxes Made EZ focuses on being proactive instead of reactive. Being reactive when it comes to tax planning, leads to taking an “Aggressive” tax savings approach, which means pushing limits – stretching deductions, stretching definitions, and pushing into grey areas. This can work in saving taxes in the short term, but do you really want to chance it and go head to head with an IRS Agent and spend the money you saved in the short term and much more in penalties and interest trying to defend grey area money?
Taxes Made EZ takes the “Proactive” tax planning approach. They scour your circumstances from everything like your family structure, retirement plans, college education for dependents, health care expenses, business ownership and your future dreams just to name a few to develop a plan based on your goals and aspirations. Taxes Made EZ believes, there is no “one size fits all” plan that works for everyone. Taxes Made EZ will first work to develop a relationship with you to understand your particular circumstances and then use that information to develop a unique “Proactive” plan. This will allow them to find every possible black-letter deduction that will deliver more savings and sustained results year after year without the fear of an IRS Agent scrutinizing every deduction taken on your return.
You can keep your financial planner and still make a change with your financial outlook, pay less in taxes legally to use towards your financial plan, instead of you overpaying. Become a proactive tax planner today instead of reactive tax avoider at the end of the year. For more information sign up for a Free Confidential Consultation.
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With our tax coaching service, we personalize your tax plan by getting an understanding of you, your family, your goals, your goals for your family, your house or homes, your job(s), your businesses, and investments, then recommends specific strategies and concepts for saving tax. We package those recommendations in plain English and in hard copy, to bring you the tax savings you really want. Sign up for a Free Confidential Consultation so you can begin keeping more of your hard-earned money and to stop losing your money to the IRS.
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Qualified Business Income (QBI) Deduction Analysis
The new tax law lowered the top tax on C corporation income from 35% to 21%. That’s a whole lot less than the maximum 37% tax on pass-through income from sole proprietorships, partnerships, and S corporations.
So, to equalize the tax treatment between taxable and pass-through businesses, the Act creates a new category of income called “qualified business income” (QBI) and lets you deduct 20% of that income, calculated on an activity-by-activity basis, from your taxable income for the year.
Pay attention to that last point. The new law lets you deduct QBI from your taxable income. That means it’s not a traditional adjustment to gross income, or “above the line” deduction, that you would take on Page One of Form 1040. It’s not an itemized deduction, either. But we’ll probably see a line right after the current Line 41, which reports adjusted gross income minus deductions, to report “qualified business income,” before calculating final “taxable income.”
For most of us, this will simply mean 20% of our passthrough trade or business income.
UNLESS you learn how to maximize it, to learn more sign up for Free Confidential Consultation.
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