Common strategies include maximizing deductions and credits, utilizing tax-efficient investment vehicles, implementing retirement plans, structuring business transactions effectively, charitable giving, estate planning, and taking advantage of tax incentives and exemptions provided by the government.

Schedule a no cost, no obligation 30 minute appointment. We will ask a few questions to see if you are a good candidate for our services You will then ask us any questions you feel is important. If you are comfortable with us and we feel we may can help, we will send you a secure portal to upload your tax returns. Scott Fedyshyn, CPA, CFP will review your tax returns and get back to you with in 1 to 14 business day to discuss your options to reduce your taxes

Tax reduction planning should be reviewed regularly, ideally on an annual basis, to account for changes in tax laws, personal circumstances, and financial goals. Major life events, such as marriage, divorce, birth of a child, or significant changes in income or investments, may also warrant a review of your tax strategy. Remember, tax reduction planning should be done in consultation with professionals who can provide personalized advice based on your specific circumstances.

Yes, tax reduction planning is legal as long as it adheres to applicable tax laws and regulations. Engaging in illegal tax evasion schemes or fraudulent activities is not part of legitimate tax reduction planning and can lead to severe penalties.

Tax reduction planning should be considered on an ongoing basis as part of overall financial and estate planning. It is most effective when done proactively, allowing sufficient time to implement strategies and take advantage of available tax benefits.

Tax reduction planning can help individuals and businesses retain more of their income and assets by legally minimizing their tax obligations. It allows for the optimization of financial resources, increased savings, and the potential for reinvestment or wealth accumulation.

Tax reduction planning can benefit individuals, families, entrepreneurs, small business owners, and corporations. Essentially, anyone who pays taxes and wants to minimize their tax burden can benefit from strategic tax planning.

It is highly recommended to seek the assistance of qualified tax professionals, such as certified public accountants (CPAs), tax attorneys, or financial advisors with expertise in tax planning. They can provide guidance tailored to your specific situation, ensure compliance with tax laws, and help optimize your tax strategy.

While tax reduction planning itself is legal, aggressive tax strategies or improper reporting can increase the risk of being audited by tax authorities. Working with knowledgeable professionals can help ensure compliance and minimize the likelihood of audit triggers. Key: To be prepared if you are audited, and with the CPAs at Redwood, you will be prepared. We sign every strategy we implement.

Tax deductions are provisions in tax laws that allow individuals and businesses to reduce their taxable income. They are designed to incentivize certain behaviors, such as investments, charitable donations, and business expenses. By taking advantage of these deductions, taxpayers can lower the amount of income subject to taxation, ultimately reducing their overall tax liability. Here are some key points about tax deductions: Deductible Expenses: Tax deductions typically apply to specific expenses incurred by individuals or businesses. Common examples include mortgage interest, state and local taxes, medical expenses, educational expenses, business-related costs, and charitable contributions. However, it's important to note that not all expenses are deductible, and the rules can vary depending on the jurisdiction. Itemized Deductions vs. Standard Deduction: When filing taxes, individuals have the option to either take the standard deduction or itemize their deductions. The standard deduction is a fixed amount set by the tax authorities, which varies based on filing status. Itemizing deductions involves listing individual deductible expenses, such as mortgage interest, property taxes, and certain medical expenses. Taxpayers can choose the method that results in a larger deduction. Tax-Advantaged Accounts: In some cases, individuals can contribute to tax-advantaged accounts, such as Individual Retirement Accounts (IRAs) or Health Savings Accounts (HSAs). Contributions made to these accounts are often tax-deductible, meaning they can be subtracted from taxable income. However, there are usually limits on the maximum contribution amounts and specific rules that govern these accounts. Business Expenses: Businesses can deduct various expenses necessary for conducting their operations. This may include rent, employee salaries, office supplies, utilities, and business-related travel expenses. Different rules and limitations may apply depending on the nature of the business and the jurisdiction. Limits and Phaseouts: Some deductions have limitations or phaseouts based on income or other factors. For instance, certain itemized deductions, such as those for state and local taxes, may be subject to a cap. Additionally, high-income taxpayers may have their deductions phased out or reduced. It's important to consult the tax laws or a tax professional to understand the specific limits and phaseouts that may apply. Record-Keeping: To claim deductions, it's essential to maintain accurate records and supporting documentation. This includes receipts, invoices, bank statements, and any other relevant paperwork that substantiates the expenses claimed. It's crucial to keep these records organized and accessible in case of an audit or a request for documentation by tax authorities. It's important to note that tax laws can be complex and subject to change, so it's advisable to consult with a qualified tax professional or reference the latest tax regulations to ensure compliance and optimize deductions.

A Cash Balance Plan should only be established if the employer intends for it to be “permanent.” The employer could possibly reduce or increase the amount of future contributions to the Cash Balance Plan. This can be done by either amending the plan document or “freezing” the benefit accruals.

We create the plan document, the actuarial calculations, prepares all tax forms, conduct annual compliance testing, select monitor and update investment options, and answer any questions that you may have.

According to the U.S. Department of Labor, there are two general types of retirement plans: defined benefit plans and defined contribution plans. A Cash Balance Plan is a defined benefit plan that acts in some ways like a defined contribution plan. Because it incorporates elements of both, it is sometimes called a “hybrid” plan. A defined benefit plan provides a specific benefit at retirement for each eligible employee. A defined contribution plan specifies the amount of contributions to be made in an employee’s retirement account. A Cash Balance Plan is a hybrid of the two in that it guarantees a specific benefit at retirement for each participant, the benefit is based on ongoing annual contributions. The advantage? The hybrid format of a Cash Balance Plan allows for the larger tax deductions and accelerated retirement savings of a defined benefit plan, while maintaining some of the flexibility and portability of a defined contribution plan

Our firm will gather financial information from the business owner and if necessary, from their CPA, to design a cash balance plan that meets the client’s objectives. Once the plan is designed and agreed to, our firm will prepare the documents for client signature. The plan is established once the documents are signed and the investment accounts are set up. The business can then begin to make contributions.

Almost always, cash balance plans are set up in conjunction with a 401k due to needed discrimination testing. If you have an existing 401K, we will review it and possibly recommend changes to ensure the two plans are compatible. If you do not have a 401k, we will most likely recommend one and set it up for you at the same time that the cash balance plan is created. Other retirement plans can be rolled over into either the new 401k or the cash balance plan in order to keep the bookkeeping as simple as possible.

Generally, a plan can be set up in two-three weeks.

Cash Balance Plan administration requires technical analysis, complex calculations and completion of IRS required forms and procedures, as well as a review by an actuary. The IRS imposes penalties for incorrect information, miscalculation, and missed deadlines – all of which can be avoided by working with a third party administrator with expertise in cash balance plans.

No. The plan’s retirement date is one of the provisions used to determine the amount of money the business must contribute each year. You may be able to amend your plan to change the retirement date. Let us know as soon as possible so we can make the appropriate amendments.​

That’s fine. Your funds can be rolled over to an Individual Retirement Account (IRA). Early planning is always helpful, so inform us as early as possible if you intend to stop working before the plan’s retirement date.

Generally, when a participant retires, they will roll their assets over into their own IRA. Funds remain tax deferred until withdrawn from the account. Additionally, if the participant desires, the account can be rolled into an account providing lifetime income for themselves and / or their spouse.

Contributions must be made by the business that is sponsoring the plan.

We work with the business owners and their CPA's in setting up the plan to determine an amount that will be comfortable to contribute for the next few years. Each subsequent year, based on changes in income, the prior year’s funding, investment performance and other information provided by the business owner, we will calculate a contribution range for the current tax year which establishes the minimum funding for the current year.

Yes. This can happen in several ways. You can always amend your Cash Balance Plan formula down for future years (but, depending on when you amend the plan, you may still be required to make the contribution for the current year). If your compensation decreases, your annual required contribution may decrease. If your investment performance is greater than the assumed interest rate, your contributions may also decrease.

Yes. A contribution is required each year to fund the benefit promised at retirement. However, the plan benefit formula can be amended for future years and thus increase or decrease the contribution amount.

Your Cash Balance Plan places no restrictions on investment volatility. You and your advisor are responsible for selecting and managing your investments. If your investments earn above the assumed rate of return, your required contributions will decrease. If they earn below the assumed interest rate, your required contributions will increase. Even though you want nice investment returns, you want to limit volatility. If volatility is low it will not have much impact on your annual contributions.

The good news is that cash balance plans allow you to invest in almost anything. As an Investment Advisor Representative, we will provide guidance and if desired, make all investment decisions for the plan. A cash balance plan may include an assumed interest rate that the funds should grow at year after year. This requires, specialized investment training and monitoring. It is also possible to set up the plan for a “market rate of return”. The downside is that future retirement benefits become somewhat unpredictable and subjects to market volativity.

Generally, we will recommend using a Cash Balance plan and a 401(k)/ Profit Sharing plan if there are non-family member employees. By combining the two plans, depending on the ages of the employees, we can often control the cost of providing benefits for employees. In addition, selecting a 1-year/1000 hours entry requirement will prevent any part-time employees from entering the plan.

Generally, yes. If you own other businesses and you are considered part of a controlled group or affiliated service group, then all businesses must be covered under the plan.

In addition to your income from the other company, you must own a business, be profitable, and have some type of compensation. Your age and compensation will control how much you can contribute to your second plan. You can also participate in both plans if the two companies are not part of a controlled group — that is, two or more firms controlled by the same 5 or fewer people.

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