Tax Planning

A key component of financial planning is gaining tax efficiency. DaVinci Capital Partners works with you and your tax preparer so you retain as much of your earned income as possible.

We utilize 5 tax planning concepts to help you shrink your tax bill:

1.Tax planning starts with understanding your tax bracket:

You can’t really plan for the future if you don’t know where you are today. The United States has a progressive tax system, so, the first tax planning goal is getting a clear understanding on what federal tax bracket you’re in.

2.Understanding the difference between tax deductions and tax credits

Tax deductions and tax credits may be the best part of preparing your tax return. They both reduce your tax bill, but in very different ways. Knowing the difference can create some very effective tax strategies that reduce your tax bill.

3.Being aware of popular tax deductions and credits

There are hundreds of possible deductions and credits out there and it’s hard to know them all, and they all have their own rules about who’s allowed to take them.  At DaVinci Capital we will work with you and your tax preparer to make sure that you are utilizing the most appropriate ones so you can take advantage of every possible deduction. 

4.Tax strategies to shelter income or cut your tax bill

Deductions and credits are a great way to cut your tax bill, but there are other tax financial planning strategies that can help keep the IRS’ hands off your money. Here are some popular tax planning strategies that DaVinci Capital can help you with: Modifying your W-4, using HSA’s and FSA’s to shelter medical costs, funding 529 plans for college funding, and taking advantage of IRA and Roth IRA’s. 

5.Knowing what tax records to keep

Keeping tax returns and the documents you used to complete them is critical if you’re ever audited. Typically, the IRS has three years to decide whether to audit your return, so keep your records for at least that long. You also should hang onto tax records for three years if you file a claim for a credit or refund after you filed your original return.