Skylar Dubrow CPA Discloses The Starting Point For Tax Planning
October 27, 2014
Skylar Dubrow, CPA
Blog
October 27, 2014Skylar Dubrow, CPABlog
Last week, I wrote to you that we would be giving some attention to “tax planning”.
If you’re not entirely familiar with the term, it’s the process by which you make moves NOW (before year-end) that can pay off in significant savings by the time we actually fill out your tax returns for you in the winter or spring.
Believe it or not, you can do many (MANY) things to help — and they have to be addressed before December 31st.
So, to get your wheels cranking (and now that we’re past the October 15th extension deadline), I wanted to give you some information.
But before I get there, I also want to address those of you who did NOT have us prepare your taxes this past year — or those who may have good friends who did not.
In fact, I’d like to offer you (or them) a gift:
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“No Charge” Return Review | Special Gift Certificate
As a complimentary service this year, we will provide a Return Review To Any Non-Client.
We will also review prior year returns from clients who did NOT have us handle their taxes during the year under question. No charge will be made, unless we find savings for you that would sufficiently warrant filing an amended return on your behalf.
Call (818) 889-7285 and mention this blog post to set up this complimentary service! |Deadline November 7th, 2014
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Whether through neglect, not keeping up with tax code changes, or simple caffeine deprivation, your 2013 tax returns may not have been everything you would have hoped. If that’s the case, use the above … and let us fix them, even now.
And THEN, we can take a look at this …
Skylar Dubrow CPA Discloses The Starting Point For Tax Planning
“Worry often gives a small thing a big shadow.” – Swedish Proverb
As a trusted Thousand Oaks tax firm, the very first thing we would do with any client who wants to get ahead of their tax bill is to first figure out what their tax bill would actually be, if all things remain the same.
While there are a lot of variables that come into play, we can get a good grasp of things by looking at the tax brackets. We’re still waiting for Congress to finalize many 2014 tax laws (an annual exercise this time of year), but the seven ordinary income tax rates are the same, starting at 10 percent and topping out at 39.6 percent.
And the IRS inflation adjustments last fall told us what income ranges will be taxed at those various rates. And, so you don’t have to go searching, here they are in the table below.
| Tax Rate | Single | Head of Household | Married Filing Jointly
or Surviving Spouse |
Married Filing Separately |
| 10% | Up to $9,075 | Up to $12,950 | Up to $18,150 | Up to $9,075 |
| 15% | $9,076
to $36,900 |
$12,951
to $49,400 |
$18,151
to $73,800 |
$0,076
to $36,900 |
| 25% | $36,901
to $89,350 |
$49,401
to $127,550 |
$73,801
to $148,850 |
$36,901
to $74,425 |
| 28% | $89,351
to $186,350 |
$127,551
to $206,600 |
$148,851
to $226,850 |
$74,426
to $113,425 |
| 33% | $186,351
to $405,100 |
$206,601
to $405,100 |
$226,851
to $405,100 |
$113,426
to $202,550 |
| 35% | $405,101
to $406,750 |
$405,101
to $432,200 |
$405,101
to $457,600 |
$202,551
to $228,800 |
| 39.6% | $406,751 or more | $432,201 or more | $457,601 or more | $228,801 or more |
Keep this handy, as it WILL be useful in the process of planning ahead.
Remember, even if your annual salary falls in the 39.6 percent bracket, that doesn’t actually mean that you pay that rate on every dollar you earn.
This is because the U.S. tax system is what is known as “progressive”. This means that you pay the top rate, or whatever bracket your income tops out at, on the “last” dollar you earn. The rest of your money is taxed at the lesser rates leading up to your top tax bracket.
So every federal taxpayer pays 10 percent on the first $9,075 of taxable income that he or she receives. That’s $907.50. Then we pay the 15 percent rate on our earnings that fall into that tax bracket and so on, until all our money is taxed at the proper rate.
These tax calculations mean that while your income may be in the 39.6 bracket, your “effective tax rate” will be less.
All of these considerations go into what moves we make, and when we make them, when we create a tax plan for clients.
And it’s no surprise that wealthier taxpayers also have to worry about some added taxes.
There’s the 3.8 percent Net Investment Income Tax, or NIIT, as well as the additional 0.9 percent Medicare payroll tax on top of the 1.45 percent all of us already have withheld from our paychecks.
These added taxes are applied if you make more than $200,000 as a single filer or $250,000 as a married couple filing jointly.
All these considerations are why it’s better to start thinking about your 2014 taxes now, instead of next April.
Which is why, it’s a very good idea to send me an email or give us a call: (818) 889-7285
Let’s get started on getting your 2014 taxes as low as legally and ethically possible, shall we?
To more of what’s yours, in your pocket…
Warmly,
Skylar Dubrow CPA
(818) 889-7285
The Dubrow Group, CPA’s
Preparing a correct and accurate tax return is our priority. We proudly stand behind our work and if a mistake does happen that is our fault, we will immediate correct the mistake and gladly refund your money if requested.
If any penalties or interest are incurred due to our mistake, we will do everything we can to fix the problem and cover any penalties should they arise.
We feel so confident in our processes to account for all deductions and uncover hidden deductions that we guarantee that you will pay the lowest amount of taxes legally possible. We spend a good amount of time correcting and fixing other so called tax pros mistakes and oversights.
We are so committed to giving out clients the best service. We do this by taking thte time to understand our clients situation and asking the right questions to make sure every deduction is accounted for. And remember we work for you, NOT the IRS.
Not only do we prepare an accurate tax return, we will inform you of tax saving strategies and best record keeping practices should we see fit.
Starting January 1, 2017, all our returns come with our “Silver” Stress Free Audit Insurance, FREE with paid tax preparation. Our Silver package includes our full support when handling IRS and State Notices for the 2016 tax year. If you receive a notice, send it to us and we will work with you to organize the required documentation and we will respond to the IRS on your behalf.
“Many tax experts are predicting an increase in IRS audits (because of the system automation), as well as an increase in audits by the state”
Our Gold Package adds our representation for an actual IRS audit for the current year. Whether it be an “audit by mail”, or an actual audit at one of the IRS locations, we will work with you to compile all the necessary documentation and represent you in front of the IRS for no additional charge. Our fees to represent our clients in an audit scenario can range from $1000- $2500 & up depending on time and complexities.
Our Gold option is an optional add on service & not included with regular tax preparation. Gold protection covers the current tax year only regardless of when you get audited.
The IRS and state authorities are behind in auditing tax returns and matching reporting documents to tax returns.They are currently working on 2012 & 2013 years.
Our Platinum level package covers you for a period of 7 years. It Is just like our Gold package, but it includes the currtent year and 6 prior years. We will provide audit coverage for prior years tax returns, even if we did not prepare them.
How is that for taking care of our clients! Once the Platinum level package is purchased, only the gold level will be required in future years as the previous years have been protected by the one time Platinum purchase.
