Personal Taxation Planning by Experienced Harrisburg Accountants

Personalized assistance and candid advice from accomplished professionals

There is a debate about just how long the U.S. Tax Code is. Some sources allege the legislation is more than 77,000 pages long, while others claim the actual text of the law is only 2,600 pages. Either way, it’s probably more than you have time to read, especially when the Code is written in language no one would mistake for plain English. So, if you want to make sure you can take advantage of every possible break written into the law, you have to get professional advice. Having a CPA prepare your taxes is helpful, but it’s a bit like closing the barn door after the horses have gone. You’ve passed an entire year allocating funds according to old habits without regard to the tax consequences. So, when you come into your local accountants office on April 14th, even the best tax wizard is only going to be able to give you limited help.

At Breon & Associates we suggest a different tactic: advanced personal tax planning. Talk to us before you start the year, and we’ll advise you on the best way to structure your spending and savings to minimize your exposure to state and federal income taxes. We have extensive experience helping personal taxation clients in Harrisburg and throughout Pennsylvania. We can help you file for the past year and prepare both for the upcoming year and for the long-term leading to a comfortable retirement.

Personal income tax planning in Harrisburg, PA

As Robert Kiyosaki famously said, “It’s not how much money you make, but how much money you keep.” That’s where personal tax planning from Breon & Associates can help. We work closely with you to examine your non-discretionary spending (e.g., your mortgages, car loans, student loans), household expenses, college savings for your kids, and retirement plans. We inform you of the tax advantages to your various options and available deductions. Then we craft a plan that fits your circumstances. Short-term planning can include:

• 401(k), IRA and Roth IRA planning
• Health savings accounts (HSA) and Flex spending plans
• 529 college saving plans
• Tax-free municipal bond investment
• Capital gains taxes

With tax planning from Breon & Associates, you can reduce your exposure to personal income taxes, so you can live better today and look forward to a comfortable retirement.

Tax issues for Pennsylvania retirees and those approaching retirement

Pennsylvania is a tax-friendly state for seniors. The Commonwealth fully exempts all income from Social Security and from retirement accounts like your 401(k) or an IRA. Your private or public pension income is also tax free if you are age 60 or older. Although state property tax rates are higher than the national average, the average total sales tax rate residents pay is among lowest 20 states in the country. All things considered, Pennsylvania is senior-friendly enough to be ranked number 14 out of 50 by Kiplinger in 2018.

Of course, setting up a comfortable retirement takes tax planning, as discussed above. But you also want to plan for your legacy to your heirs, which requires its own tax planning. Tax considerations for your legacy can include:

• Inheritance tax — Although a surviving spouse does not pay Pennsylvania Inheritance Tax on inherited wealth, the tax rate is 4.5 percent for transfers to direct descendants (lineal heirs), 12 percent for transfers to siblings, and 15 percent for transfers to other heirs (except charitable organizations, exempt institutions, and government entities that are exempt from tax). The executor of the estate is responsible for the tax.
• Federal estate tax — If your estate is worth roughly $5.6 million ($11.2 million for a couple), you could trigger the federal estate tax. That means your wealth in excess of these amounts will be taxed at 40 percent.

Our team can advise you on various estate planning strategies that reduce the value of your estate and thereby reduce your tax liability. These strategies involve trusts you create to hold your assets for your enjoyment during your lifetime, which continue to hold your assets after your passing or transfer them seamlessly to your heirs. Trusts are very flexible instruments, so we can help you design a plan that fits your circumstances and addresses your concerns.