Tax Planning Starts Now: 8 Things To Do Now to Lower Your 2024 Taxes - Part 1

It might seem a bit early to think about your 2024 taxes, but as the time for paying 2023 taxes comes to a close, it's the perfect time to take a closer look at your financial situation and make some strategic moves that can help you minimize your tax liability for this year.

Year-end tax planning isn't something you do at the last minute; it's a series of thoughtful steps you can start taking right now. In two segments, we’ll explain eight key actions you can take during this year to save money on your 2024 taxes.

Let’s get started.

FinanceStephen PennerApril 2, 2024Taxes, Income Tax

How Do Trusts Help You Save on Taxes?

Many people come to us curious (or confused) about trusts and taxes. So today’s article is going to sort it out and clarify things for you.

There are two major types of trusts, and each has different tax consequences.

INCOME TAXES

Revocable trusts, which are the far more commonly used trusts, have no immediate tax consequences whatsoever. A revocable trust has your social security number as its tax identifier, and is not a separate entity from you for tax purposes. It is a separate entity from you for purposes of probate, meaning if you become incapacitated or die your Trustee can take over without a court order, keeping your family out of court. But, until your death, it’s treated as invisible from a tax perspective. At the time of your death, if your revocable trust provides for the creation of irrevocable trusts, then the tax implications will shift.

Estate PlanningStephen PennerApril 28, 2023Taxes, Estate Tax, Income Tax, Capital Gains Tax, Trusts

Three Critical Considerations For How to Save For Your Child's (or Grandchild's) College Education - Part 1

Since 1996, 529 plans, which are named for Section 529 of the Internal Revenue Code, have been one of the most popular options for covering college costs. Congress expanded these plans to cover K–12 education in 2017, and it also changed the program to pay up to $10,000 in student loan debt in 2019.

One reason 529 plans are so popular is due to their tax-saving advantages. The money you contribute to a 529 account grows on a tax-deferred basis, and withdrawals are tax-free, provided they are used for qualified education expenses, such as tuition, room and board, and other education-related fees. And many states also provide a tax deduction or credit for 529 contributions.

Another appealing feature of 529 plans is their relatively high contribution limits. There is no limit on how much you can contribute each year, although if you contribute more than $17,000 (the amount of the gift tax exemption limit in 2023), you can trigger federal gift taxes and the requirement to file a gift tax return. If you plan to make a contribution close to or above $17,000, contact us for guidance.

Trusts & Taxes: What You Need to Know

People often come to us curious — or confused — about the role trusts play in saving on taxes. Given how frequently this issue comes up, here we’re going to explain the tax implications associated with different types of trusts in order to clarify this issue. Of course, if you need further clarification about trusts, taxes, or any other issue related to estate planning, meet with our Personal Family Lawyer® for additional guidance.

TWO TYPES OF TRUSTS

There are two primary types of trusts — revocable living trusts and irrevocable trusts — and each one comes with different tax consequences.

TWO TYPES OF TRUSTS

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TWO TYPES OF TRUSTS

(805) 965-0085