Tax Planning Service
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Welcome to Private Client Advisers, where we offer exceptional tax planning services.
Thanks to the Internet, US Citizens are better informed today than ever before. Yet, one thing missing from this arsenal of information has been a guide to help people through the first few steps of tax planning. Sadly, many have jumped into tax planning without having a basic understanding of the process. All too frequently, this only results in losing an audit. The purpose of this article is to familiarize you with the “ins and outs” of tax planning and to educate you on the terms you should know and the dangers to stay clear of as you investigate various tax plays and interview the advisors to help you with your taxes. The tax code describes certain types of transactions or entities that have been given favorable tax treatment. Amortization, depreciation, inventory plays, income shifting, IRAs and other strategies like them constitute essential elements of tax planning basics. However, the Internal Revenue Code sets forth 287 broad categories to be used in tax planning. The professionals of Private Client Advisers can show you how to properly use the more complex and sophisticated sections of the Code that may dramatically reduce your taxes. |
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What is Tax Planning?
In simplest terms, tax planning is using the tax code to take advantage of every possible credit, deduction, exemption, exclusions, and write-offs allowable by law. Legitimate tax planning does NOT include:
1) Failing to report taxable income
2) Misrepresenting facts
3) “Hiding” funds in an offshore jurisdiction, or
4) Failing to pay taxes based upon the “unconstitutionality” of the tax law.
The tax code describes certain types of transactions or entities that have been given favorable tax treatment. Any one of these tax-favored transactions or entities is generally referred to as a “Tax Strategy.” To put it another way, tax planning is analyzing the tax code to determine which strategies are or can be made applicable to your circumstances.
Moreover, tax planning should include your gaining an understanding of the advantages and limitations of the strategy so that you are not putting into motion a strategy that will hinder you from reaching your other financial goals down the road. An important point to remember is that no single strategy will perfectly meet all your needs. Congress has designed each strategy for a specific and narrow use. As such, many individuals use a combination of strategies in their overall plan, thus allowing the individual to benefit from the favorable tax treatment of the various strategies while reducing the amount of overall limitations.
Once we pick a tax strategy or strategies help you meet your end goals, PCA will assist you in doing due-diligence and execution. We also work with tax attorneys that can provide our clients with legal reviews and opinion letters.
1) Failing to report taxable income
2) Misrepresenting facts
3) “Hiding” funds in an offshore jurisdiction, or
4) Failing to pay taxes based upon the “unconstitutionality” of the tax law.
The tax code describes certain types of transactions or entities that have been given favorable tax treatment. Any one of these tax-favored transactions or entities is generally referred to as a “Tax Strategy.” To put it another way, tax planning is analyzing the tax code to determine which strategies are or can be made applicable to your circumstances.
Moreover, tax planning should include your gaining an understanding of the advantages and limitations of the strategy so that you are not putting into motion a strategy that will hinder you from reaching your other financial goals down the road. An important point to remember is that no single strategy will perfectly meet all your needs. Congress has designed each strategy for a specific and narrow use. As such, many individuals use a combination of strategies in their overall plan, thus allowing the individual to benefit from the favorable tax treatment of the various strategies while reducing the amount of overall limitations.
Once we pick a tax strategy or strategies help you meet your end goals, PCA will assist you in doing due-diligence and execution. We also work with tax attorneys that can provide our clients with legal reviews and opinion letters.
What are some of the tax planning service strategies Private Client Advisers Offers?
At Private Client Advisers we have many different tax planning strategies to fit all our client’s needs. Every transaction has a tax implication. These tax implications can affect every transaction in different ways. Here are some strategies that Private Client Advisers can employ to bring value to you as your advisor.
Capital Gains Tax Mitigation Strategies:
At Private Client Advisers, we offer several different tax deferral strategies to accommodate all our diversified client's needs. With every transaction there is a tax concern that will be due upon constructive receipt of the sale. This will always affect the final sales price. We employ strategies that help mitigate the capital gain tax, income tax and a combination of both depending on the sale itself and the overall result our client is looking to achieve. We have found that there is never one solution that fits all. Every strategy has its advantages and limitations. We often use multiple strategies to create the framework of how every transaction is executed to tailor make an overall strategy that fits the client's overall goals for the sale of a capital asset.
For more information on our tax planning services, call our team today.
For more information on our tax planning services, call our team today.
Ordinary Income Tax Mitigation:
Ordinary Income is any type of income that is actively earned by an organization or an individual. This type of income includes wages, salaries, tips, bonuses, rents, royalties, interest income and short term investment income (investment held for less that one year and one day). These types of income are taxed at ordinary income tax rates which will generally be a much higher tax rate then a long term capital gain rate.
We work with clients to take advantage of the different ordinary income tax planning tools available to them. Private Client Advisers offers very specialized ordinary income tax planning tools. We work with our clients on a macro level to time, shift and convert ordinary income tax to a environment that reduces the friction on these types of taxable events. Our overall goal is to tailor these different strategies to address our clients real world tax problems so that we can help mitigate, reduce, or defer these types of taxes.
We work with clients to take advantage of the different ordinary income tax planning tools available to them. Private Client Advisers offers very specialized ordinary income tax planning tools. We work with our clients on a macro level to time, shift and convert ordinary income tax to a environment that reduces the friction on these types of taxable events. Our overall goal is to tailor these different strategies to address our clients real world tax problems so that we can help mitigate, reduce, or defer these types of taxes.
USVI Economic Development Companies:
There are significant economic benefits to doing business in the U.S. Virgin Islands (USVI). As a United States protectorate, the USVI is governed by the United States Congress and are subject to all applicable US laws. Federal mandate permits the USVI government the autonomy to collect all applicable business and personal taxes from companies and individual residents to the USVI through the Bureau of Internal Revenue (BIR). The USVI tax code mirrors the U.S. tax code, including tax brackets and statutes in many ways. Private Client Advisers offers a unique program that was established to allow qualified individuals to take advantage of the tax incentive benefits offered by the USVI. Most importantly however, Private Client Advisers allows individuals and companies to benefit from the USVI legislation who would not ordinarily qualify for such participation.
Puerto Rican Act 20/22:
There are not very many places in the world that offer tax incentive programs and a return on investment like Puerto Rico. To boost its economy, Puerto Rico has passed aggressive economic and tax incentive legislation that is attracting companies and individuals from around the world that want to take advantage of its favorable tax environment created by Act 20/22 of 2012.
Act 20- Export Services:
Act 20 or 2012 is known as the Act to promote the exportation of services. This act is designed to attract companies to establish and/or expand their export services to take advantage of tax incentives. This Act also promotes investments and initiatives from the private sector by granting tax credits and exemptions.
Notable highlights:
Act 22- Individual Incentives:
Act 22 of 2012 Seeks to attract new residents to Puerto Rico by providing a total exemption from the U.S. Territories income taxes on all passive income. This exemption is issued to bona fide residents of Puerto Rico and results in new local investments in real estate, consumption products, and services. Puerto Rico in turn gets large capital injections into its banking sector and local economy which accelerates growth and economic stability for the island.
Notable highlights:
Act 20- Export Services:
Act 20 or 2012 is known as the Act to promote the exportation of services. This act is designed to attract companies to establish and/or expand their export services to take advantage of tax incentives. This Act also promotes investments and initiatives from the private sector by granting tax credits and exemptions.
Notable highlights:
- 4% Corporate tax Rate
- 100% Tax exemption on dividends or profit distributions
- 100% Exemptions on property taxes
Act 22- Individual Incentives:
Act 22 of 2012 Seeks to attract new residents to Puerto Rico by providing a total exemption from the U.S. Territories income taxes on all passive income. This exemption is issued to bona fide residents of Puerto Rico and results in new local investments in real estate, consumption products, and services. Puerto Rico in turn gets large capital injections into its banking sector and local economy which accelerates growth and economic stability for the island.
Notable highlights:
- 100% tax exemption on all dividends and interest income
- 100% tax exemption on all capital gains
- 4% corporate tax rate
Custom Designed Life & Annuity Structures:
Here at Private Client Advisers we specialize in creating customized, open architecture life insurance. Life Insurance policies are an unmatched investment vehicle when it comes to taxation. Life Insurance is funded with post-tax dollars, but the growth and consumption are tax free. By custom designing life insurance, we help our clients create a life insurance structure and tax environments that can reduce the friction on their asset growth by as much as 90%. We work with multiple insurance companies that specialize in Private Placement Life Insurance and Annuity Products.
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