Tax Planning in Springfield, Missouri
When it comes to estate planning and wealth preservation, taxes are one of the most obvious concerns. Unfortunately, many people do not take advantage of the multitude of legal means to limit their tax exposure. These unnecessary tax dollars could be invested in your family’s future, used to pay for your medical care, or donated to a charitable organization of your choice. With careful tax planning, you can rest assured that you are only paying necessary taxes and that your money is being put to its best use.
Income Tax Planning
The first area our Springfield tax attorneys focus on is the income you receive from your employment or retirement. Our team will help identify areas in your financial plan where you could benefit from additional tax deductions, tax credits or other reduced taxation so we can coordinate with your tax professional for implementation. We can also work with you to formulate a tax strategy that enhances your overall estate plan. In the end, you could have more financial freedom for your immediate needs and more assets to provide for your family in the future.
Investment and Capital Gains Planning
While capital gains are taxed at a more favorable rate than employment income, the taxes on a well-performing investment can be an unpleasant surprise at time of liquidation. Many investors do not realize there are ways to strategically reduce their tax liability on their investment income. We can review your investment portfolio and identify areas where you may be able to better manage your tax liability:
- Short-term vs. long-term capital gains. Investments held for less than a year are considered short-term capital gains and are taxed at a higher rate. We can discuss with you whether holding your short-term investments for a longer period of time would be more consistent with your financial goals.
- Tax-advantaged retirement accounts. If your investment goals are long-term, we can discuss how a retirement account can reduce your tax liability and whether it may be a better option for your estate planning strategy.
- Using losses to offset your gains. Another way to reduce your tax liability is to use your losses to offset your gains. Short-term losses must be used first to offset short-term gains and long-term losses must be used first to offset long-term gains. We can help you coordinate with your tax professional to ensure you are utilizing your losses appropriately.
We recognize that each client has a different investment strategy. Whatever your goals may be, our goal is to help you manage your taxes with confidence.
Using depreciation is another way to offset your tax liability, much like a tax deduction. Depreciation applies to the loss of an asset’s value over the course of its useful life. However, correctly claiming and calculating depreciation is very complex, especially for business owners with diverse, significant assets. As a result, we recommend that you do not attempt to claim depreciation without first speaking with an accountant or other tax professional.
To qualify for depreciation, you must meet the following criteria:
- The depreciating asset is used for income-generating activities;
- You own the asset; and
- The asset has a determinable useful life and will last at least one year.
At LifeGen Law Group, our Springfield tax attorneys can help you identify depreciation benefits you are entitled to and assist you in timing business purchases to take advantage of these deductions.
Understanding Cost Segregation
Cost segregation is a tax planning tool available to real estate investors that allows them to deduct a property’s depreciation more quickly. In a nutshell, it allows owners to identify assets within a building that can be depreciated over a shorter period of time, resulting in a much larger deduction than would otherwise be available in that shortened timeframe. The tax savings afforded by this planning strategy allows for the allocation of extra cash flow to renovations or improvements of the property or to investing in additional properties. The tax planning team at LifeGen Law Group will discuss with you whether cost segregation is something that you should consider.
Stepped-Up Cost Basis
Stepped-up cost basis allows you to claim a higher cost-basis of an inherited asset at the time of the decedent’s death rather than using the value when the asset was originally purchased. This can result in significant tax savings if the asset is later sold, as the increase in value is thereby reduced. We work with our clients to make sure they are structuring their estate plans to take advantage of these savings and are correctly claiming any applicable step-up in cost-basis when the assets are sold.
Contact Our Springfield Tax Attorneys at LifeGen Law Group
At LifeGen Law Group, we aim to provide life-long tax guidance to our clients, helping you feel confident that your resources are being put to the best possible use. To discuss your tax needs and how we can help, contact us today via phone or email to schedule a consultation. LifeGen Law Group works with individuals, families and businesses in Springfield, Branson and throughout Missouri.