TAX PLANNING

Tax planning is the process of analyzing your monetary situation and preparing for upcoming tax events. Proper tax planning helps you with efficient tax payments and to plan for your expenditure and saving ratio. Tax planning is necessary to plan your financials in the most tax-efficient manner.

Avant Tax, the Texas based tax service provider and financial counselor provides you with the best and most tax-efficient accounting for taxation service in Texas, with its team of tax experts to help you with maximum benefits out of your tax payments.

Obviously, the simplest method to benefit maximum out of your taxes is to limit your taxes. We help you to make tax-smart investments and reduce the IRS each year and convert your taxes into savings. Apart from traditional tax saving methods, we help you with a wide range of attractive tax saving plans that will help you save more without reducing your income, without increasing your expenses, and by taking advantage of tax credits. Our tax planning solutions bring you a combined package of multiple actions and benefits that makes you a tax-smart investor.

Avant Tax helps you be tax-smart with our accounting for taxation service in Texas by breaking down the entire scenario into two processes.

At Avant Tax, we have broken down the paradigm of Tax Planning into two major heads:


AVANT SELECT

Strategic tax planning

We create a tax plan to help reduce tax liabilities. We optimize your portfolio across taxable, tax-deferred, and tax-free accounts, taking into account your income, capital gains, and our capital market projections to give you a complete tax picture.

 
Personalized services:
We get to know you and your family so we can provide you with solutions based on an intimate knowledge of your needs.

A holistic approach

Our comprehensive approach is what makes the difference. In addition to tax planning and preparation, our Advisors team comprising of CPA.s EAs, Financial Planners, & Attorney’s takes care of everything from investments and estate planning to insurance solutions. We do the heavy lifting so that you don’t need to worry about securing your family’s financial future.

AVANT SELECT PLUS


Accredited Investor-level Tax Planning
  • Real Estate
  • Oil & Gas: Domestic energy production is a national priority – energy fuels the economy and powers cities, states, and governments. Another reason for these deductions is the inherent risk, and traditionally high buy-ins, involved in oil and gas investing. Tax Breaks for investors provide financial benefits for oil and gas investing, regardless of the drilling outcome.
    1. TAX BREAKS FOR INVESTORS - ACTIVE VS. PASSIVE INCOME: The tax code specified that a working interest (as opposed to a royalty interest) in an oil and gas well is not considered to be a passive activity. This means that all net losses are active income incurred in conjunction with well-head production and can be offset against other forms of income such as wages, interest, and capital gains.
    2. FINANCIAL ADVANTAGES - DEPLETION ALLOWANCE: The IRS also gives a 15% depletion allowance against production revenue to allow for the drop in oil and gas reserves in a well. The 1990 Tax Act allows certain entities to exempt 15% of their gross income from federal taxes to help support smaller oil companies and direct investors.
    3. INVESTING IN OIL - ALTERNATIVE MINIMUM TAX: The Energy Policy Act of 1992 repealed both ATM preference items, percentage depletion, and IDC, for independent producers and royalty owners, not integrated oil companies. All excess intangible drilling costs have been specifically exempted as a “preference item” on the alternative minimum tax (AMT) return. The AMT was established to ensure that taxpayers paid a minimum or their “fair share” of taxes by recalculating the income tax owed, and adding back specific preferential tax deductions or items.
Qualified Opportunity Zone Tax Planning
Tax-free investment through Qualified Opportunity Zone Funds (QOFs): Opportunity funds aid in the development of the areas facing economic hardships while also offering taxes and rewards to investors. This in return results in significant improvements to the properties in which they invest.

How a Qualified Opportunity Fund (QOF) Can DeferCapital Gains Taxes
If you’re selling a business interest, real estate, or other highly appreciated property, you could get hit with a substantial capital gains tax bill. One way to soften the blow—if you’re willing to tie up the funds long-term—is to “roll over” the gain into a qualified opportunity fund (QOF).

What is a QOF?
A QOF is an investment fund, organized as a corporation or partnership, designed to invest in one or more qualified opportunity zones (QOZs). A QOZ is a distressed area that meets certain low-income criteria, as designated by the U.S. Treasury Department. Currently, there are more than 9,000 QOZs in the United States and its territories. QOFs can be structured as multi-investor funds or as single-investor funds established by an individual or business. To qualify for tax benefits, at least 90% of a QOF’s funds must be QOZ property, which includes:

  • QOZ business property: This is tangible property used by a trade or business within a QOZ. It must meet certain other requirements.
  • QOZ stock or partnership interests. These are equity interests in corporations or partnerships with substantially all their assets in QOZ property. (Final regulations define “substantially all” to mean at least 70%.)
What are the benefits?
If you recognize capital gain by selling or exchanging property, and you reinvest an amount up to the amount of gain in a QOF within 180 days, you'll enjoy several tax benefits:
  • Taxes will be deferred on the reinvested gain until the earlier of Dec. 31, 2026, or the date you dispose of your QOF investment.
  • The taxability of your gain will be permanently reduced by 10% if you hold the QOF investment for at least five years (and an additional 5% if you hold it for at least seven years).
  • If you hold the QOF investment for at least 10 years, you'll incur tax-free capital gains attributable to the appreciation of the QOF investment itself.
The only way to obtain these benefits is to first sell or exchange a capital asset in a transaction that results in gain recognition. You then would reinvest some or all of the gain in a QOF. You can't simply invest cash.
You or your heirs will eventually be liable for taxes on some or all of the original gain. Consider ways to avoid those taxes, such as holding the original property for life or doing a tax-free exchange.

How do you report QOF gains?
In February 2020, the IRS issued guidance on reporting gains from QOFs. It details how to report the deferral of eligible gains and how to include those gains when the QOF investment is sold or exchanged. Taxpayers who defer eligible gains from such property (including gains from installment sales and like-kind exchanges) by investing in a QOF must report the deferral election on Form 8949, Sales and Other Dispositions of Capital Assets, in the deferral tax year. Taxpayers selling or exchanging a QOF investment must report the inclusion of the eligible gain on the form.

Offshore Jurisdiction Tax Planning
An offshore jurisdiction is a low or no-tax country with corporate laws that maximize financial privacy and minimize corporate regulatory interference for both individuals and corporations.

Tax Advantages

A World-Class Tax Benefits Package

In the U.S. Virgin Islands, unique tax benefits translate to a better bottom line. The USVI’s tax program is not only one of the most competitive tax benefits packages within the Caribbean but across the globe.  The USVI offers a tax program that is fully sanctioned by the U.S. government and Internal Revenue Service.

Through the Economic Development Commission’s (EDC) tax program, qualifying companies are eligible for the following tax benefits, among others:

  • 90% reduction in corporate income tax
  • 90% reduction in personal income tax
  • 100% exemption on excise tax
  • 100% exemption on property taxes and gross receipts tax
  • No state or territory tax
Paying Taxes in the U.S. Virgin Islands
The U.S. Virgin Islands uses a mirror system of taxation, also known as the “Mirror Code,” meaning that USVI taxpayers pay taxes to the Virgin Islands Bureau of Internal Revenue ("BIR") generally to the same extent as U.S. taxpayers would under the Code to the U.S. Internal Revenue Service.
To learn more about the EDC Program and other tailored tax benefits found in the Territory, through initiatives such as the Hotel Development Act and Enterprise Zones, visit our Incentives page.  

All the Benefits of Being Part of the United States

As an unincorporated United States Territory, the U.S. Virgin Islands has all the benefits of being a Caribbean location with key U.S. benefits.
This unique territory status enables St. Croix, St. John, St. Thomas, and Water Island to utilize U.S. currency, courts, and flag protection. Local affairs are led by the Governor and Legislature. Being within a U.S. jurisdiction also provides the following benefits to companies operating in the islands:
  • “Made in USA” labeling
  • Shipping advantages
  • Duty-free imports
  • Duty-free and quota-free exporting of USVI-made goods into the U.S.
  • No state or territory tax


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