For high-net-worth individuals in New York who are preparing to file their taxes, trying to minimize the tax burden without running the risk of an audit or other bad outcome. There are a lot of strategies that they can employ to meet these goals.
Tax planning
Many of the most common tax breaks that households can take advantage of are not available to high-net-worth families or individuals. They must pursue other strategies to lower their tax burden legally. Since many people with a high net worth are small business owners, there is a powerful tool that they can use. Small businesses have the ability to set up their own retirement plans, health savings accounts, and other benefits for their employees and owners. These all have tax advantages as long as you follow the rules about contributions, withdrawals, spending, and the time horizon.
Wealthy families can also take advantage of transferring assets to their kids. 529 plans, trusts, and other tools can provide a useful way to get tax writeoffs while handing down some money or preparing for future expenses. These are legitimate ways to keep money in the family while reducing taxes. However, the IRS can be harsh with attempts to circumvent these rules with family partnerships and other potential dodges that transfer assets between family members at reduced prices, so be warned.
Every high-wealth family wants to reduce their taxes, and if they are careful, they can find plenty of ways to do so. It is important to stay within the law to avoid getting into trouble with the IRS and winding up paying penalties instead of saving money.