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Ask anyone if they “pay too much income tax” and the knee jerk reaction is almost always, “Yes!” and without much hesitation. Why do we call that a knee jerk reaction? Because if you then follow the question up with two more questions, “What did you pay in federal tax last year? And/or what bracket are you in?” they almost as quickly say, “I don’t remember, or I’m not sure.” Or they might guess at a bracket percentage, but usually not correctly. We’ve even had people profess the pain of paying too much in tax only to discover that not only did they get back all of their withholdings, but they were given tax credit refunds of money they did...

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It may sound odd when you say it out loud, but after considering all the facts, it’s quite true. It’s an emotional but understandable reaction to think you always want to lower your tax bill as much as possible. However, except in the case of death, the tax code is basically a case of “tax me now or tax me later.” In many cases, to lower your current tax bill means that income avoided or deductions taken now are going to come back into your life at some later point. One example would be an IRA. You put money in an IRA and lower today’s tax bill, but those dollars will need to be taxed at some point. When you...

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In the “old days,” you went to the general store for your dry goods, the blacksmith for your horseshoes or tool repair and likely had your own cow and chickens for milk and eggs. Fast forward, you went to a lawyer to get a will, an insurance rep to get a policy and an accountant to get your taxes done. There was no internet, so information was something you had to gather and organize yourself. You would talk to a few co-workers, a family member, a mentor and then take actions based on the limited intel. Back then, you would sit with a financial advisor, and if they were a big deal they might have a stock ticker pumping out tape right...

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First, let us make it clear that we aren’t saying that your CPA or accountant is doing anything wrong. The accounting industry is one of the most honorable and respected fields around. That being said, there is a misconception that they are going to be proactive when advising clients about their taxes, and that’s just not part of the training most have received. Certainly some are, but the majority who know things about steps a business could take to perhaps be more aggressive on tax planning for the future, don’t feel it’s their responsibility to pursue a client in engaging in alternative accounting choices or behaviors. A good example is “Bob” who owns a tire shop that has grown from two employees...

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Well, do they or don’t they, actually? Long debated and often manipulated by the media, the topic of the wealthy and taxation has many, many complex points and counterpoints. First, when people say that, they often don’t define what kind of tax. The people hearing the comment usually go to federal personal income tax in their mind as TAXES. However, if a wealthy person owns 20 C corporations, with each filing their own tax returns, those C corporations pay their own taxes and unless the wealthy person needed to take a dividend or other distribution, then they could pay zero federal income tax, even though their companies paid potentially millions in taxes themselves.   The kinds of taxes people pay depends...

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Have you ever seen a cat on the side of the road that waits until the very last second and then darts across the road in front of traffic? Ever see one that didn’t make it and think, “Some child is going to be very sad soon.”? I always wonder what makes the cat wait until the last second, but then again that’s what most taxpayers seem to do. They wait until February or March with a filing deadline looming and then dash out in front of a tax preparer and beg, “Is there anything we can do to lower this?”  Like the cat, perhaps the preparer has an idea and they miss getting hit with the entire bill, but...

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It’s July. In a few short months people will be filing their 2025 tax returns with that familiar recurring moan and groan about paying too much. Now is the time to take your preventative medicine and avoid the pain next time around! Being human, we all form habits. Some good. Most bad. We try to develop good ones to replace the bad ones and often we are successful, but most successes don’t come without a coach, cheerleader or some kind of support. Tax time is usually a time of regret over not being successful at last year’s promise to oneself, “I’m not going to pay this much again. I`m going to keep better records and search out a tax planner or some professional...

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Many people who do not deal in the tax preparation or planning business think of taxes as something to deal with one day per year. Like Christmas, only not as good. So perhaps more like “Grinch Day.” Nevertheless, it doesn’t get a lot of attention after April. It drifts into the “Thank goodness that’s over!” mental space and goes away until the new year. It’s different for self-employed small business owners, as tax related issues are dealt with more often, but it’s still mechanical in nature. “I’ve got to go deposit payroll taxes today” or “I need to send in my 941 quarterly payment this week.” But still, their thoughts are not focused on proactive activities, but more so on...

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If you pay attention and plan your tax outcomes proactively, there are many things you can do to reduce your tax bill. But the planning and the resulting activities that you need to engage in to achieve those outcomes are all year-round actions you must take, not just things to do the week before you file. Start by opening your calendar and marking a day each month to spend an hour on your taxes. That’s 12 hours a year. If when you file your taxes those year-round activities saved you $1500, then you were “paid” $125.00 an hour, which is worthwhile! If you saved $10,000.00 in taxes, that would be $833 per hour. Sign me up for that job! Start...

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When planning ahead, or just engaging in their day to day operations, most business owners at least occasionally think about tax deductions. A business dinner that can be partially deductible, or a new machine that can be depreciated. However, they often don’t think about or plan how to acquire other tax credits, which can often be much more valuable. Tax credits are often transitory, with the benefits increased or reduced from year to year, or sometimes eliminated altogether, only to be brought back again several years later. Over the last few decades we have seen some popular credits renewed or in some cases even made a permanent part of the tax code. Small business owners seem to often not be...

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