Tax Planning Archives

Early 2025 Tax Planning: Important Deadlines for Individuals & Business Owners

By Office Staff|2025-02-13T16:46:40-08:00February 13, 2025|Categories: Tax Planning|Tags: Tax Deadlines|0 Comments

At SWC — Southern California’s independently owned tax planning and financial strategies advisory firm for entrepreneurs and small business owners, real estate investors, and high-net-worth individuals — we know tax deadlines can be overwhelming. And if you’ve been with us awhile, you know that staying ahead of the game can help you avoid unnecessary penalties and stress.

Below, we’ve outlined the most important tax dates for business owners, entrepreneurs, and individual taxpayers for February through April. Here’s what you need to know:

Important Tax Dates for Business Owners & Entrepreneurs

FEBRUARY 2025

Feb. 10 (note: if you missed this deadline and would like assistance, please contact our office for help):

Employers must file Form 940 (Employer’s Annual Federal Unemployment (FUTA) Tax Return form), Form 941 (Employer’s Quarterly Federal Tax Return form), Form 943 (Employer’s Annual Federal Tax Return for Agricultural Employees form), Form 944 (Employer’s Annual Federal Tax Return form), and Form 945 (Annual Return of Withheld Federal Income Tax form) — but only if taxes were deposited on time and in full.
Employees who earn tips must report January tips to their employer via Form 4070 (Employee’s Report of Tips to Employer form).

Feb. 18:

If an employee claimed an exemption from income tax withholding on their 2024 Form W-4, they must file a new Form W-4 to continue that exemption for 2025.

Feb. 28: Continue reading… Continue reading… Continue reading…

Breaking: New Deadlines for Beneficial Ownership Reporting Announced

By Office Staff|2024-12-24T13:45:58-08:00December 24, 2024|Categories: Tax Planning|Tags: Beneficial Ownership, Fifth Circuit Court of Appeals, FinCEN|0 Comments

The world of compliance and financial reporting is complex, and staying informed of recent changes in rules and regulations is essential to protecting your business and avoiding costly fines.

Recent court decisions surrounding the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting rule have reshaped the reporting landscape yet again. Yesterday, another court weighed in on the BOI. Here’s what you need to know to stay ahead.

What Happened with the BOI and How Does It Affect Your Business?

On December 23, 2024, a panel of Fifth Circuit judges granted the government’s motion to stay a December 3, 2024, nationwide preliminary injunction ordered in the Texas Top Cop Shop, Inc., v. Garland case. What that means is the court reinstated the reporting requirements for beneficial ownership information (BOI) with the Financial Crimes Enforcement Network (FinCEN).

Going back a bit further, the CTA, which was established by Congress as part of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, seeks to combat financial crimes by increasing transparency surrounding corporate ownership. When the legislation was sent to the President to sign into law in December of 2020, he vetoed it, after which the U.S. House of Representatives and the United States Senate both voted to override the veto, making the Act’s beneficial ownership information requirement effective as of Jan. 1, 2021.

For now, as a result of yesterday’s ruling, most businesses are required to comply with the CTA’s reporting requirements, with extended deadlines to account for the injunction’s temporary impact.

Updated Deadlines You Need to Know About

To give businesses time to adjust to the reinstated reporting requirements, the U.S. Department of the Treasury has extended several deadlines:

For Companies Created or Registered Before January 1, 2024:
- New Deadline: January 13, 2025
  (Previously, these companies would have had to report by January 1, 2025.)
For Companies Created or Registered Between September 4, 2024, and December 23, 2024:
- New Deadline: January 13, 2025
For Companies Created or Registered Between December 3, 2024, and December 23, 2024:
- New Deadline: 21 days after their original filing deadline.
For Disaster Relief-Eligible Companies:
- Deadline: The later of January 13, 2025, or the extended deadline specified for disaster relief.
For Companies Created or Registered After January 1, 2025:
- Deadline: 30 days after receiving notice that their registration or creation is effective.

Why These Deadlines Matter Continue reading… Continue reading… Continue reading…

Heads Up! Four Things You Need to Know Before the End of Tax Year 2024

By Office Staff|2024-12-11T16:29:52-08:00December 11, 2024|Categories: Tax Planning|Tags: Beneficial Ownership, Flexible Spending Account, Individual Retirement Account, Tax-deferred Retirement Accounts|0 Comments

As the calendar year draws to a close, changes to the tax code and regulations are inevitable — regardless of which political party holds sway in Washington, D.C., or controls state legislatures in California or elsewhere.

The end of 2024 is no exception, with several updates that could save you or your business money as we enter the new year or leave you with less of your hard-earned money in 2025.

Here are four items to be aware of as we approach year-end:

Maxing out your tax-deferred retirement contributions
FSA contribution limit increases for 2025
Qualified charitable distributions for eligible IRA owners by year-end
Recent change to Beneficial Ownership Information (BOI) reporting

As we’ll explore below, there’s still time to take advantage of the first three tax-saving opportunities before the year ends. For the fourth item — beneficial ownership information reporting — while you also have time to file before the beginning of the year, a recent court ruling favors anyone concerned about the prospect of facing fines or criminal charges for failing to do so.

Here’s what you need to know to make informed decisions before 2024 comes to a close.

Maxing Out Your Tax-deferred Retirement Contributions

For 2024, the IRS has increased contribution limits for various retirement accounts: Continue reading… Continue reading… Continue reading…

Using an S Corporation to Reduce Your Income Tax

By Office Staff|2024-11-20T12:30:02-08:00November 20, 2024|Categories: Tax Planning|Tags: Business Taxes, S Corp, Tax Strategy|0 Comments

If you’re an entrepreneur or small-business owner, you may be aware of a common tactic for reducing your income tax: You form an S corporation and then use it to pay yourself a combination of wages and distributions. Put simply, an S corporation is a corporation that chooses to be taxed as a pass-through entity (a business structure where the profits and losses “pass through” directly to the owners, who report them on their personal tax returns, instead of the business paying corporate taxes).

Under this plan, you pay income tax on both wages and distributions, but you pay self-employment tax — Social Security and Medicare — only on wages. Income from distributions is not subject to Social Security and Medicare withholding.

On its surface, this tactic saves you about 15.3 percent in taxes on the amount you pay yourself in distributions, because as an employer/employee, you’re responsible for paying both halves of Social Security and Medicare. As an employer, you pay 6.2 percent Social Security and 1.45 percent Medicare, and an amount equivalent to that as employee. If you crunch the numbers, that’s 6.2 percent + 1.45 percent = 7.65 percent x 2 = 15.3 percent.

However, you need to be aware of three important considerations: Continue reading… Continue reading… Continue reading…

Tax Planning for a Second Trump Presidency

By Office Staff|2025-07-10T10:34:21-07:00November 13, 2024|Categories: Tax Credits, Tax Planning|Tags: Estate Tax, Tariffs, Tax Cut and Jobs Act, Tax Policy, Trump|0 Comments

The votes are in, the winner has been declared. Now’s the time to start planning your taxes around the second Trump presidency (2025-2028). Of course, taxes aren’t entirely within the purview of the President of the United States — only Congress has the power to change the tax code. However, the president has tremendous influence over it.

For his part, the president proposes tax policies that can influence public opinion, rallies Congress to pass tax legislation, and has the power to veto any tax legislation proposed by Congress. And while the president can’t change the tax code through executive orders, he can direct agencies to implement certain tax policies or interpretations and pay less attention to others.

So, what changes to the tax code can we expect from a second Trump presidency? In many ways, we can expect to see more of the same — an extension of many of the provisions in the Tax Cut and Jobs Act (TCJA) that Congress approved in late 2017 near the middle of the first Trump presidency. In addition, we can likely count on additional tax relief to promote growth and increase take-home pay for workers.

In this post, we review key provisions of the TCJA, which will expire at the end of 2025 unless Congress acts to extend them, and we highlight changes to the tax code that Trump proposed during his campaign.

Tax Cut and Jobs Act Provisions That Are Set to Expire in 2025

Many of the TCJA provisions were intended to be temporary. Unless Congress acts to extend them, the following provisions are set to expire at the end of 2025: Continue reading… Continue reading… Continue reading…

Last-Minute Moves for Individual Taxpayers to Reduce 2024 Federal Income Tax

By Office Staff|2024-11-06T11:36:43-08:00November 5, 2024|Categories: Tax Planning|Tags: Income Tax, Individual Taxpayers|0 Comments

With only two months remaining in the tax year, the time has come to get serious about reducing your 2024 federal income tax bill. The good news is that it’s not too late. The bad news is that you’re running out of time.

In this two-part series, we share tax-saving strategies you can implement prior to the end of this year to reduce your tax obligation for 2024. In Part 1, we focus on strategies for individual taxpayers. In Part 2, we shift our focus to tax-saving strategies for business owners.

Note: For now, we’re assuming that the tax law currently in effect for 2024 will remain in place. If anything changes due to the outcome of the upcoming election, we will certainly let you know. However, any changes to the tax code that would apply retroactively to 2024 would require an act of Congress, which isn’t likely.

Check Your Tax Withholding and Estimated Payments

To avoid any underpayment penalty, make sure the Federal Income Tax (FIT) withheld from your paychecks plus any estimated tax payments for 2024 is equal or greater than:

Your 2023 tax liability, or 110 percent of your 2023 tax liability if your 2023 adjusted gross income (AGI) exceeded $150,000 if you file as Married Filing Jointly (or $75,000 if you file as Married Filing Single), or
90 percent of your 2024 tax liability

Participating in a Tax Projection Meeting in November or December can help you estimate your 2024 tax liability and adjust your withholding or calculate an estimated tax payment to minimize any potential underpayment penalty.

To schedule a year-end Tax Projection Meeting with SWC Founding Partner Marni Walker, please call our office at (858) 487-4580.

To schedule with Founding Partner Laura Stees, visit www.SWC.cpa/Contact, click “Schedule an Appointment,” then select “Tax Projection” to choose a convenient day and time.

Consider Bunching Itemized Deductions

Each year, you can deduct the greater of your itemized deductions (mortgage interest, charitable contributions, medical expenses, and taxes) or the standard deduction. The 2024 standard deduction is as follows:

$29,200 for couples who are married filing jointly (MFJ)
$14,600 for singles and for individuals who are married filing separately (MFS)
$21,900 for those who file as head of household (HOH).

If your total itemized deductions exceed your standard deduction every year, itemizing every year is best. However, if your total itemized deductions are close to the standard deduction without exceeding it, you may be able to save money by “bunching” your itemized deductions, so they exceed your standard deduction every other year.

For example, if you file a joint return and your itemized deductions are steady at around $28,000 per year, you will end up claiming the standard deduction in both 2024 and 2025. However, if you can bunch expenditures so that you have itemized deductions of $32,000 in 2024 and $24,000 in 2025, you could itemize in 2024 and get a $32,000 deduction versus a $29,200 standard deduction. In 2025, your itemized deductions would be below the standard deduction, so you’d claim the standard deduction.

Here are a few ways you can bunch deductions by moving them into an earlier tax year: Continue reading… Continue reading… Continue reading…

Tax Planning: It’s Not Just for the Super Wealthy

By Laura Stees, CPA|2024-10-30T12:59:49-07:00October 30, 2024|Categories: Tax Planning|Tags: Tax Deductions, Tax Planning|1 Comment

It’s no secret that some of the wealthiest people in the United States pay the least income tax. According to some reports, billionaires can even get their income tax down to zero, and it’s entirely legal.

In some instances, they build their wealth through ownership of shares in one or more companies and then borrow against that wealth to cover their expenses. And because they don’t realize any gains from selling shares, they’re not earning income subject to tax. In fact, they can even claim the interest they pay on their loans as a deduction against any income they earn!

Here at SWC, that’s what we call savvy tax planning. Don’t you wish you could do that?

Well, you may not be wealthy enough or low-income enough to pay zero income tax, but if you’re somewhere in between, strategies are available for reducing your tax bill and building your wealth at an accelerated rate. Tax-saving strategies include maximizing tax deductions and credits and contributing to tax-deferred retirement accounts. And you don’t have to be super-rich to take advantage of them. You just need to engage in tax planning.

What Is Tax Planning?

Tax planning is the process of analyzing your financial situation to minimize tax liabilities. It involves careful consideration of income, expenses, investments, deductions, credits, and future opportunities to take advantage of all available tax laws and regulations.

Suffice it to say, tax planning plays a crucial role in building wealth. By investing some or all of the money you save on taxes, you can provide yourself with additional tax-savings options while your investments grow in value.

Understanding Tax Planning: Tax planning is the exercise of reviewing the amount of tax you pay in an effort to maximize your after-tax income. To do this properly, it is important to understand myriad federal and state rules and regulations related to deductions, credits, income deferral, and tax minimization strategies where possible.

When you engage with a tax planning firm like SWC, the process is designed to help you or your business pay the least amount of tax legally possible, based on current tax law and regulations as they relate to your current and future financial goals and objectives. Legal tax strategies encompass leveraging retirement planning, estate planning, investment income, investment vehicles, and the optimization of your business operations if you own a business or work in an entrepreneurial capacity.

Here are some of the ways tax planning can help you build wealth: Continue reading… Continue reading… Continue reading…

The Top 10 Reasons to Ask Your CPA for a Mid-Year Meeting This Summer

By Office Staff|2024-06-13T12:13:54-07:00June 11, 2024|Categories: Tax Planning|Tags: Mid-Year Meeting|0 Comments

Here at SWC, where we’re known as a leading independently owned tax planning and financial strategies advisory firm, we believe in empowering our clients with the tools and knowledge they need to make informed financial decisions.

Part of that approach is to offer a complimentary mid-year meeting that helps our clients navigate the complexities of tax planning, reduce their tax-related liabilities, and maximize their financial well-being.

If you’ve never heard of a mid-year meeting, it’s generally considered a preemptive move that allows you to discuss your financial situation with your CPA well before the end of the year when it’s often too late to implement strategies that can reduce your 2024 tax labilities.

Being on the fence about scheduling a mid-year tax meetings is understandable. After all, it’s summer, and who wants to be cooped up in a meeting with a CPA? But consider this: you have the ability to meet with us online — yes, even from your hotel room if you’re on vacation. Just pick a time slot that is available from now through the end of August. It’s only an hour of your time that likely will result in many hours of peaceful sleep before the end of the year.

With that in mind, here’s our top 10 reasons why you — the individual taxpayer — should schedule a mid-year meeting with your CPA this summer:

Review and Adjust Your Withholding: A mid-year review of your withholding can ensure that you’re on track to meet your tax obligations without overpaying. Adjusting your withholding now can prevent surprises at tax time and help you manage your personal cash flow more effectively.

Maximize Retirement Contributions: Reviewing your retirement contributions mid-year allows you to make necessary adjustments to maximize your savings. Whether it’s contributing to an IRA, 401(k), or

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