Over the course of your lifetime, a substantial amount of the wealth that you earn will be lost to taxes. Unfortunately, the possibility of your wealth being paid to the government in taxes does not end with your death either. Taxes can affect your ability to accomplish your financial goals during your life as you pay large sums to the government, and can have a tremendous adverse impact on heirs or beneficiaries when estate tax is assessed after a death.
To minimize the impact of taxes and to make sure you are not paying more than is required, you need tax strategies. These strategies need to be developed by an experienced attorney who understands the tax code and who can provide you with advice on saving money while complying with the law. Nehoray and Drake, LLP is here to help. Give us a call to get personalized assistance with developing tax strategies and to get answers to questions you may have including:
- What tax strategies should I adopt?
- Why is it important to get legal help with tax strategies?
- How can a tax planning lawyer help me?
What Tax Strategies Should I Adopt?
Identifying an appropriate tax strategy is important for many decisions that you will make. For example, you must craft a tax strategy when:
- Structuring your business: There are different tax rules for sole proprietorships, partnerships, S-corps, and C-corps. You need to make certain that if you run a business, you select the type of entity that will provide you with the most tax advantages. S-corps, for example, can provide you with flexibility to take some of your income as distributions so you save on Medicare and Social Security tax. C-corps, on the other hand, can provide many benefits but could result in double taxation without careful planning.
- Planning for retirement: When you invest for retirement, different kinds of accounts provide you with different tax breaks. You need to consider whether you want to invest with pre-tax funds or whether it would be preferable to withdraw money and not pay taxes at the time you take the money out.
- Devising an investment strategy: There are a host of complex tax rules to consider when you invest in various types of products. Investing in MUNI bonds, for example, can have substantially different tax consequences than investing in stocks or real estate. You must understand how taxes will affect your investment and choose the right investments that are part of an overall tax planning strategy.
- Creating trusts: Trust creation can provide asset protection and can sometimes help you to avoid estate tax. However, you could also lose certain tax benefits by transferring assets into various types of trusts. If you are creating trusts, you need to work with an experienced attorney who understands tax rules and who can provide you with appropriate advice.
- Making your estate plan: Estate planning requires careful consideration of tax issues. You want to minimize or avoid the assessment of death taxes on your estate when your assets transfer to the next generation.
- Making charitable gifts: When giving gifts during your lifetime or after your death, there are tax implications associated with your charitable contributions. You should work hard to maximize the tax breaks you get while providing the best support for the charities that you care about.
These are just a few of many different situations where it becomes important to develop a tax strategy. You should not make big money decisions without knowing the implications of your choices on state taxes and federal taxes.
Why is it Important to Get Legal Help with Tax Strategies?
The tax code is one of the most confusing volumes of law in the entire country. There are many esoteric rules and failure to follow any of them could result in substantial financial penalties. You cannot afford to take risks when it comes to trying to comply with tax law.
In the tax code, there are also ample opportunities for saving on taxes, provided that you know how to work within the tax law. An experienced attorney can provide you with help in making a strategic plan to reduce your tax burden without skirting the law and putting yourself in legal jeopardy.
How can a Tax Planning Lawyer Help Me?
Nehoray and Drake, LLP provides assistance with all of your tax planning issues, and we help you to devise appropriate tax strategies for every area of your life. To find out more about the ways in which our legal team can help you with your tax issues, give us a call today.