Golden Gate Bridge Practice Areas - Income Tax Planning

Although Albert Einstein once said, "the hardest thing in the world to understand is the income tax," there is a logic to the Internal Revenue Code that can be deciphered by those willing to seek the education and training to do so.

Basic Principles. Income tax planning starts with an understanding of a few basic principles, including the following:

  • Defer the recognition of income (e.g., through retirement plans or "tax-deferred" exchanges).
  • Accelerate deductible expenses (e.g., through the use of "Section 179 expensing" of depreciable property).
  • Take advantage of "artificial" deductions (e.g., depreciation on real property).
  • Allocate income among multiple taxpayers, in order to maximize the use of "lower" tax brackets (e.g., through the use of trusts).
  • Recharacterize income to the most favorably taxed "type" of income, where possible (e.g., ordinary income to capital gains, qualified dividends, or tax-exempt interest).
  • Use business entities in such a way as to avoid "double taxation" (e.g., use of S corporation, rather than C corporation).
  • Take full advantage of "tax incentives" that Congress enacts periodically (e.g., the research and development credit).

Apply the Law and the basic principles to the facts. Income tax planning for you has to take into account your current situation, your long-term objectives, your risk-aversion, your family needs, etc. You may not need a "tax overhaul." But you may want to bounce ideas off of our professionals to obtain a reality check. We will help you to develop a strategic plan and to implement it.

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