Tax Planning Services for Houston Individuals and Businesses
Tax planning services are a companion to tax preparation services, providing a longer range strategy that helps clients maximize their savings – and minimize their burdens – over many years. Tax planning can be extremely complex, especially for taxpayers who own their business or other significant assets.
Evident Pros can help clients maximize their tax efficiency with various tax planning tools and strategies. As every taxpayer’s situation is different, Evident Pros creates an individualized strategy for every client. The goal being to optimize tax savings and reduce tax liabilities.
Evident Pros’ Tax Planning Services and Strategies
For a particular taxpayer, the right tax planning approach must consider future financial goals, future expenses, the taxpayer’s age, marital situation, the presence of dependents, the assets they own, whether they own a business – and many more factors. As such, the Evident Pros team will develop a custom set of strategies for every client to optimize their tax savings. Those strategies may include:
- Establishing tax-deductible retirement instruments – One of the most effective ways for individual taxpayers to save is to invest in retirement investment vehicles. Health savings accounts (HSAs), IRAs and 401(k)s. Recently, contribution limits to these plans have been raised – the IRA limit was bumped up from $6,000 to $6,500 in 2023 – so it’s time to review your accounts if they haven’t been addressed in the past tax year.
- Offsetting capital gains with tax-loss harvesting – Tax-loss harvesting involves selling securities at a below-market rate (usually following a sudden slide in value), realizing the losses and then buying back into the market with the cash freed up from selling those securities. The losses can be used to offset capital gains taxes and up to $3,000 in standard income if losses exceed capital gains taxes. Losses can also be carried forward indefinitely to offset future gains. There are tight rules on how stocks, bonds and other securities can be sold and bought in this fashion, so it’s critical to speak with a CPA and CFP before attempting to harvest losses.
- Bunching deductible expenses – If timed properly, taxpayers can cluster their deductible expenses together to maximize their itemized deductions during filing. This has become more difficult since the Tax Cuts and Jobs Act was passed in 2017 and raised the standard deduction. If you or your business anticipates a wave of deductible expenses in the near future, making those purchases now and itemizing them may save money by eclipsing the standard deduction.
- Choosing the right structure and accounting method for a business entity – For taxpayers that own, or are invested, in a business entity, tax planning may include switching the company’s structure or accounting approach. Sole proprietorships, partnerships and corporations are taxed differently. C-corps are subject to double taxation, for example, while S-corps are pass through entities that do not pay tax at the corporate level. S-corps also enjoy other tax advantages, such as paying owners using distributions that aren’t subject to payroll tax. S-corp owners can also take the qualified business income (QBI) deduction in some circumstances. A CPA can guide their clients through the process of switching business structure, which is governed by a formal process. The company’s accounting structure can also have tax planning implications. Business owners have a choice between cash and accrual accounting methods, as long as their income remains under $25 million. Cash accounting usually offers superior tax benefits to owners, so it may be worth it to transition to a different accounting method. CPAs can spearhead this for their clients.
- Optimize tax benefits when giving to charity – Charitable donations are deductible, but there are qualifications and limitations. Donations to 501(c)(3) organizations confer additional tax benefits to givers, and donations may be cash or in-kind property. Depending on what’s donated and who it’s donated to, there may be limits to what can be deducted, so maximizing tax benefits through better-planned giving is an option. Business owners can also deduct time and expenses spent during charitable events. This is another way to minimize taxes while being creative with philanthropic efforts.
- Tightening up bookkeeping processes – Bookkeeping is a frequently overlooked part of the tax planning process. Precise record keeping not only supports tax compliance and proves your tax position, it may reveal discrepancies between balance sheets and accounts. If so, there may be tax-saving opportunities hidden among your accounting data.
For most taxpayers, a combination of the above strategies will typically render the best results – and there are many more strategies to consider beyond these. The question is what strategies to apply and how to apply them in order to maximize tax efficiency. That’s where a certified public accountant can make the difference.
Planning with a CPA: Why certified public accountants are the trusted tax planning experts
As tax planning is complex and must consider long-range factors, it should only be handled by someone with expert-level knowledge of the Internal Revenue Code. This could be your tax preparer, but not all tax preparation professionals are able to step into a tax planning role – the scope of tax planning may be beyond what they’re willing to offer.
That’s why, for most taxpayers, CPAs and certified financial planners (CFPs) are the first choice for tax planning services. Evident Pros’ team is staffed by CPAs with decades of tax-related accounting and legal experience. We are also partnered with Altere Financial, a CFP and certified investment management analyst (CIMA) that can provide ongoing financial and wealth management guidance, including tax planning services.
If you’re searching for a tax planning professional, here’s why it’s worth working with a CPA or CFP:
Expert level knowledge of tax law
The core strength of CPAs and CFPs is their knowledge of the tax code. This knowledge extends into the legal realm, as CPAs can advise their clients on the potential legal ramifications of making certain financial decisions. When working in tandem, CPAs and CFPs can guide their clients into optimizing their taxes while remaining in compliance with the code.
Verified credentials and educational history
Anyone can claim to be a financial planner or tax expert, but CPAs and CFPs have proven their expertise through education and examination. A CPA must attain at least an undergraduate degree (though a master’s in finance or accounting is common), must pass an extensive examination similar to the bar, must maintain a state license and must finish 120 hours of continuing education every three years.
A CFP is also expected to hold an undergraduate’s degree and must also pass a comprehensive exam (one with a pass rate just about 50 percent) and cannot claim the CFP title until they’ve gained at least three years of experience in financial planning application.
Representation rights and tax compliance
Tax planning is closely related to tax compliance and the two services are often offered contiguously. A CPA’s extensive tax code knowledge means they are best-suited to advise on compliance matters. Many CPAs have experience working with business owners and can provide tax compliance services for enterprise-level organizations.
Further, CPAs can represent their clients during communications with the IRS. In fact, CPAs are among the few who can provide comprehensive representation, meaning they can represent their clients during IRS audits, appeals and payment/collection issues.
With a CPA and CFP team, your tax concerns can be comprehensively addressed, no matter their complexity or scope.
You may be paying more taxes than your should - tax planning services can put a stop to that
Aside from CPAs and CFPs, few people enjoy spending time on taxes. There could be thousands at stake, though, as tax planning services may uncover many opportunities to improve tax efficiency.
Evident Pros’ tax planning approach is comprehensive and informed by decades of experience with the tax code. As such, we can provide a deep review of our clients’ taxes and ensure they are as efficient as possible.