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Tax Planning For Individuals

Individual Tax Preparation

Effective tax preparation and planning can help you minimize your future tax liability. We can help you proactively manage both your personal and your business tax issues, including understanding how upcoming business opportunities impact your tax status and vice versa. Not all tax planning opportunities are readily apparent. By having us on your team, you are far more likely to get the benefits from those opportunities. We understand how the latest federal, state, and local tax legislation as well as any other relevant developments may affect you and your business and we are constantly identifying new ways to reduce federal, state or local tax liabilities.

Asset prices occasionally deviate from values implied by underlying fundamentals and this creates opportunities that our processes are designed to identify and exploit.


The general rule is that if your total income for the year doesn’t exceed a certain amount, you don’t need to file a federal tax return. That amount depends on the type of income, your age and your filing status. For example, in 2020, you don’t need to file a tax return if you:
  • Are under the age of 65
  • Are single
  • Don’t have any special circumstances that require you to file (like self-employment income)
  • Earn less than $12,400 (which is the 2020 standard deduction for a single taxpayer)
The tax system gives you a choice of adding up all of your deductible expenses—and providing evidence of those expenses to the IRS upon request—or simply deducting a flat amount, no questions asked. That flat amount is called a “standard deduction.”

There are seven federal tax brackets for the 2020 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your bracket depends on your taxable income and filing status. These are the rates for taxes due in April 2021.

The United States has a progressive tax system, which means that people with higher taxable incomes pay higher federal income tax rates.

  • If you belong to a tax bracket, that doesn’t mean you pay that federal income tax rate on everything you make. This kind of system means that people with higher taxable incomes are subject to higher federal income tax rates, and people with lower taxable incomes are subject to lower federal income tax rates.
  • The government decides how much tax you owe by dividing your taxable income into chunks, which are tax brackets, and each one of these gets taxed at the corresponding tax rate. What is great is that no matter which bracket you’re in, you won’t pay that tax rate on your entire income. (This is the idea behind the concept of effective tax rate.)

Call us if you need help with tracking down the exact details for the current year and your financial tax advice.

The essence here is this: if your standard deduction is less than your itemized deductions, then the advice is to itemize and save money. If your standard deduction is more than your itemized deductions, then it is better to take the standard and save some time.

You can find the extensive list of tax deductions and credits on the Schedule A on the Form 1040 tax return.

The IRS provides for a wide range of itemized deductions which include: charitable contributions, Medical and Dental Expenses deduction, Home mortgage points that may be deductible, work-related education, State and local income, sales and property taxes, Personal casualty losses which qualify for a deduction, Business use of your home and deduct the cost of your home office.

Tax credits are applied to the amount of tax you owe to reduce that amount. There are two types of tax credits:

  • Nonrefundable tax credits give you a refund only up to the amount you owe.
  • Refundable tax credits give you a refund even if it’s more than you owe.

Typical tax credits include: tax credits for caring for your aging parents, as well as for costs associated with adoption, Income and savings credits Earned Income Tax Credit or Saver’s Credit. The IRS also offers tax credits related to foreign taxes you’ve paid and capital gains, Residential Energy Credit for energy-efficient properties, some health care tax credits, the Lifetime Learning Credit.

Tax deductions allow you to deduct from your income before you calculate the amount of tax you owe. Tax exemptions were effectively discontinued until 2025 as part of the Tax Cuts and Jobs Acts in 2017. Deductions have been increased to compensate for the loss of personal and dependent exemptions. Tax credits are dollar-for-dollar reductions in your tax bill. You subtract tax credits from the amount of tax you owe.

There are three main ways to file taxes: fill out IRS Form 1040 or Form 1040-SR by hand and mail it (not recommended), use tax software and file taxes online, or hire a human tax preparer to do the work of tax filing. Contact us for help with tax filing, we can help this process run smoothly.

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