June 7, 2012. California, as we all know, is the land of high taxes. Initiatives on the November ballot will seek to raise both the sales tax and income taxes to new, unprecedented levels as the state seeks to close its budget deficit. Politics aside, the reality is that we live in one of the highest tax states in the nation. Those who live in San Francisco face some of the highest city taxes as well.
Here are some common issues, today –
- We love living in California – the state’s physical climate and its climate of innovation make it one of the top places to do business.
- Despite its pro’s, the state has many negatives – among them an increasingly expensive business environment.
- Talented people live and work in California, yet they all struggle to retain what they earn vis-a-vis the tax man (Sacramento or Washington, it doesn’t matter!)
Tax Planning in the Golden State of California
That brings us to tax planning. High net worth individuals and small businesses need to plan their tax strategies to minimize California tax liabilities. How can this be done? One example is the choice of business formation – sole proprietorship, LLC, C-Corp, S-Corp… they are so many different ways to organize a business. We at Safe Harbor work with our clients to correctly set up the organization at the beginning so that tax implications are minimized. A second example regards estate planning. For a high net worth individual who wants to leave his family a legacy, there are many ingenious ways to organize that transition. Do it correctly and you can live in the Golden State and still have some gold left; do it incorrectly and Sacramento will take a big bite out of your inheritance. Third, many individuals benfit from the engine of California growth – stock options and tech companies. Again, correct tax planning can minimize the tax implications of stock options.
Safe Harbor – Being One of the Best CPA Firms in California
Tax planning is what we do. We work harder for our clients, whatever the tax climate in the Golden State. Today, we are looking at an unprecedented tax climate. Let’s work together so when you hear the word ‘climate’ you think sunny beaches and San Francisco beauty, and not the tax bite coming from Sacramento! Call or email us today for a free consult!