You may be able to take an immediate Section 179 expense deduction of up to $1,080,000 for 2022 ($1,050,000 in 2021), for equipment purchased for use in your business, instead of writing it off over the years. There is a phaseout limit of $2,700,000 in 2022 ($2,620,000 in 2021). In addition, self-employed individuals can deduct 100 percent of their health insurance premiums. You may also be able to establish a Keogh, SEP, or SIMPLE IRA plan and deduct your contributions (investments).
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What special deductions can I get if I'm self-employed?
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What is the best way to donate to charity?
If you're planning to make a charitable gift, it generally makes more sense to give appreciated long-term capital assets to the charity, instead of selling the assets and giving the charity the after-tax proceeds. Donating the assets instead of the cash avoids capital gains tax on the sale, and you can obtain a tax deduction for the full fair-market value of the property.
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Can I save on taxes by filing separated returns instead of jointly with my spouse?
You sometimes may benefit from filing separately instead of jointly. Consider filing separately if you meet the following criteria: One spouse has large medical expenses, miscellaneous itemized deductions, or casualty losses. The spouses' incomes are about equal. Separate filing may benefit such couples because the adjusted gross income "floors" for taking the listed deductions will be computed separately.
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I have a large capital gain this tax year. What should I do?
If you also have an investment on which you have an accumulated loss, it may be advantageous to sell it prior to year-end. Capital gains losses are deductible up to the amount of your capital gains plus $3,000 ($1,500 for married filing separately). If you are planning on selling an investment on which you have an accumulated gain, it may be best to wait until after the end of the year to defer payment of the taxes for another year (subject to estimated tax requirements).
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What other tax-favored investments should I consider?
For growth stocks you hold for the long term, you pay no tax on the appreciation until you sell them. No capital gains tax is imposed on appreciation at your death. Interest on state or local bonds ("municipals") is generally exempt from federal income tax and from tax by the issuing state or locality. For that reason, interest paid on such bonds is somewhat less than that paid on commercial bonds of comparable quality. However, for individuals in higher brackets, the interest from municipals will often be greater than from higher paying commercial bonds after reduction for taxes. For high-income taxpayers, who…
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What tax-deferred investments are possible if I'm self-employed?
Consider setting up and contributing as much as possible to a retirement plan. These are allowed even for a sideline or moonlighting business. Several types of plans are available: an individual or self-employment 401(k) plan, a SEP (Simplified Employee Pension), and the SIMPLE IRA plan.
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How can I make tax-deferred investments?
Through the use of tax-deferred retirement accounts you can invest some of the money you would have otherwise paid in taxes to increase the amount of your retirement fund. Many employers offer plans where you can elect to defer a portion of your salary and contribute it to a tax-deferred retirement account. For most companies, these are referred to as 401(k) plans. For many other employers, such as universities, a similar plan called a 403(b) is available. Some employers match a portion of employee contributions to such plans. If this is available, you should structure your contributions to receive the maximum…
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What can I do to defer income?
If you are due a bonus at year-end, you may be able to defer receipt of these funds until January. This can defer the payment of taxes (other than the portion withheld) for another year. If you're self-employed, defer sending invoices or bills to clients or customers until after the new year begins. Here, too, you can defer some of the tax, subject to estimated tax requirements. You can achieve the same effect of short-term income deferral by accelerating deductions, for example, paying a state estimated tax installment in December instead of at the following January due date.
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Why should I defer income to a later year?
Most individuals are in a higher tax bracket in their working years than during retirement. Deferring income until retirement may result in paying taxes on that income at a lower rate. Deferral can also work in the short term if you expect to be in a lower bracket in the following year or if you can take advantage of lower long-term capital gains rates by holding an asset a little longer.
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What types of tax services does W R Howell, CPA offer?
We specialize in Income Tax Preparation in Orlando FL, tax planning, and consulting services, catering to both individuals and businesses seeking comprehensive solutions.
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How do your tax planning services benefit businesses and individuals?
Our Tax Accountants in Orlando are experts in developing strategies that minimize tax liability and boost financial health, ensuring you make the most out of every financial opportunity.
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Can W R Howell, CPA assist with tax issues for both local and federal taxes?
Yes, our Tax Accountants in Orlando are well-versed in both state and federal tax regulations, ensuring that your Income Tax Preparation in Orlando FL is compliant at all levels.
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What makes W R Howell, CPA different from other tax preparation services in Orlando?
Unlike others, our Tax Accountants in Orlando provide a personalized approach, combining big-firm expertise with a small-firm touch, particularly in Income Tax Preparation in Orlando FL.
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Do you provide digital solutions for tax preparation and accounting?
Yes, our Tax Accountants in Orlando utilize the latest digital technologies to enhance accuracy and efficiency in Income Tax Preparation in Orlando FL.
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How often should I consult with my tax accountant?
We recommend regular consultations with our Tax Accountants in Orlando to keep your financial and tax strategy aligned with current laws and your evolving financial situation.
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What are the benefits of ongoing tax planning with W R Howell, CPA?
Ongoing tax planning with our Tax Accountants in Orlando ensures that you are always prepared for financial uncertainties and can make informed decisions that benefit your tax situation.
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How can W R Howell, CPA help if I am audited?
Our Tax Accountants in Orlando provide robust support during audits, ensuring that your Income Tax Preparation in Orlando FL is defended with detailed documentation and strategic expertise.
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