Tax Planning

Rollins Financial has tax and accounting experts that will work to reduce the amount of taxes you have to pay the government, thereby increasing the amount of money you have to spend or save. By increasing your tax deductions, reducing your taxable income by investing in retirement accounts, and taking advantage of tax credits and helpful provisions in the tax law, we can minimize your tax debt and put you in a better position to achieve your financial goals.

Adjusted Gross Income(AGI) is your income from all sources after all deductions and adjustments have been made. This is what your tax liability is based on. Financial entities such as mortgage lenders and college financial aid offices may also request AGI information to help determine your eligibility or fitness.

Rollins Financial can help you lower your tax bill with a three-pronged approach:

  • Lowering your taxable income, or your AGI

  • Increasing your tax deductions

  • Utilizing tax credits

Lowering Your AGI: 

The best place to start is to make full use of the tax-advantaged retirement savings vehicles legally available to you; employer-sponsored 401(k) or 401(b) accounts and traditional or simplified employee pension (SEP) IRAs.

401(k)s and 403(b)s can be a powerful savings tool for individuals, allowing employees to compound their retirement saving through employer matches and reap the benefits of tax deferment until retirement. They can also create huge tax savings in the present, as contributions reduce your AGI in the present by a dollar-for-dollar basis.

The basic employee compensation limit for 2019 to a 401(k) or 403(b) is $19,000, with a catch-up allowance of $6000 annually if you’re over 50. The IRS, though, does employ a Highly Compensated Earner designation which may inhibit your ability to participate in a 401(k) fully. The limit on annual additions (the combination of all employer contributions and employee elective deferrals to all 401(k) and 403(b) accounts) generally is the lesser of $56,000 or 100% of includible compensation for the employee’s most recent year of service.

In a traditional IRA, taxes on contributions are deferred until you actually withdraw your money. You get to deduct your annual contributions from the adjusted gross income on your yearly taxes, lowering your AGI in the present. Since most retirees withdraw IRA funds in lower tax brackets than they would have while working, this can amount to a great deal of tax savings.

IRAs offer you a great deal of investment flexibility. They typically allow users to choose any investment option that is available in a standard investment account, including common or preferred stocks, bonds, mutual funds, certificates of deposit(CDs), and exchange traded funds(ETFs).

Beginning in 2019, you many contribute up to $6000 annually into a traditional IRA, and $7000 if you are over the age of 50. Anyone with earned income may continue making contributions until the age of 70 1/2. Withdrawals prior to the age of 59 1/2 are penalized, so there is a built-in financial incentive to preserve your IRA funds until retirement. You pay no taxes until funds are withdrawn.


Imagine your accountant and financial planner, working in harmony. Just for you.

SEP IRAs differ from most other retirement plans in that all contributions for a SEP IRA come from the employer. In most plans, employees make the lion’s share of retirement contributions, while the employer provides matching or profit-sharing contributions. Because SEP IRAs do not allow employee contributions, participants aged 50 and above are also not eligible to make catch-up contributions. As of 2019, contribution limits are set at 25% of salary up to an annual maximum of $56,000.

You can find a full list of AGI adjustments on Form 1040, page 1, lines 23 through 34. They include expenses for educators, health savings account contributions, moving expenses, some business expenses, and some insurance expenses for the self-employed. Rollins Financial can help you determine which adjustments you are eligible for.

Increasing Your Tax Deductions:

The Tax Cuts and Jobs Act of 2017 has created an incentive for many people to simply take the standard deduction on their tax return and no longer itemize their deductible expenses. The standard deduction for a single filer jumped from $6350 in 2017 to $12,000 in 2018. For couples filing a joint return, it nearly doubled from $12,700 to $24,000.

It may still be in your financial interest to itemize, though. You should keep track of all your itemized expenses throughout the year in a spreadsheet or readily available tax software. You will be able to lessen your tax burden by itemizing deductions if the total exceeds the standard deduction for your filing status.

The three largest categories of tax deductions available for most filers are mortgage interest, state taxes, and gifts to charity. There are, however, many others, including deductions for health care, state and local taxes, personal property taxes, expenses related to your employment, and some investment-related expenses.

Taking Advantage of Tax Credits:

Policymakers like to employ tax credits to encourage certain types of consumer choices and behavior. There have been tax credits for buying hybrid automobiles or investing in solar energy. There are tax credits for costs associated with higher or continuing education. You may be eligible for tax credits related to elder care or child care/adoption. The earned income tax credit(EITC) benefits working people with comparatively low income. Under the EITC, some people who actually owe no federal tax may even be eligible for a refund, so long as they file a tax return.

Given the number and variety of tax credits which may apply, it’s a good idea to consult a tax expert about your particular situation. We’ll make sure you receive all the tax credits that apply.

Rollins Financial works hard to stay current with tax law to make sure our clients minimize their tax liability and have the best chance possible to reach their financial goals.