Paying More for Everything
We are going to pay more for everything in the future. Most real estate professionals should be aware that we are enduring the highest level of inflation in 30 years. Colorado is one of the states where the measured inflation rate is above 7% on average – (https://on.wsj.com/3nqGzSR) Gas prices jumped almost 50% from a year ago.
Inflation is a hidden tax impacting the working people harder. However, it is great for the government. The second quarter of 2021 combined tax revenues for property, sales, and gross receipts, and income taxes for State and Local Governments increased 32.5 percent –(https://bit.ly/3nsjY8o).
It is not just inflation; the Build Back Better program (currently being considered in Congress) would increase taxes on up to 30% of middle-class families in 2022. –(https://tpc.io/3oAISSJ). Note that this increase is expected to be less than $350 per taxpayer. Many taxpayers will pay more taxes in 2023 than in 2022. But that is not all; the expiration of the 2017 Tax Cuts and Jobs Act (expires 2025) would increase taxes for households.
In this environment of increasing expenses and taxes, real estate professionals should do everything possible to defend the money that they work hard to earn. Defense is the most important feature of winning the game. You earned the profit, and you should keep it to accomplish your own dreams whatever they are.
A detailed strategic tax plan will tell you what to do, when to do it, how to do it and why to do it. It is in writing. Unless your tax advice is in writing, it is meaningless. It is indexed to tax law which defines what you can do, revenue procedures which describe how to do it, and tax court cases which set the boundaries on what is allowed. The plan will cover how the tax system works; your family, home, and job; setting up your business, maximizing deductions in your business; efficiently paying yourself; building your retirement income; investing for retirement; exiting your business; transitioning your activity to your family; and increasing your cash flow.
Isn’t this type of guidance what you want from your tax professional? How you can reduce your taxes and save the most cash possible so you can accomplish your personal goals? Unfortunately, most tax professionals work on a model which is designed to gather your information, prepare the return, and file it for you. Their model does not include any additional time to coach you in reducing taxes and saving cash. You may want to ask yourself - “when was the last time my tax professional suggested a way that I could reduce my taxes?”
At Stone CPA and Advisors, we continually work to improve your ability to reduce your taxes and save cash. We are now offering a new tax plan designed to assist real estate professionals starting their business activity. We call it the “starter” plan. It focuses on getting your business started and organized so that you can be tax efficient but is not as comprehensive as the detailed strategic plan. To find out which plan is the best for you, join us in a Discovery Session where we look for mistakes and missed opportunities in your tax situation. Email us at email@example.com to get more information on how you can get more of your money by reducing your taxes.