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How to Reduce Taxable Income through effective Tax Planning Strategies

How to Reduce Taxable Income through effective Tax Planning Strategies

Want to know how to reduce taxable income! Want to know how the rich build wealth and keep more of their money? It is all about knowing how to lower your tax liability through effective tax planning strategies. When it comes to financial stability and building generational wealth, one of the most daunting hurdles can be mastering the tax code. Yet, with the right knowledge and strategy, taxes can become a powerful tool in one’s wealth-building arsenal. Sugey Piedra, co-founder of Prominence Business and Wealth Management, gives us the chisme on tax strategy in in our latest podcast episode.

How to Build Wealth and Lower Your Tax Liability with Tax Planning
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Sugey Piedra
Certified Tax Preparer and co-founder of Prominence Business & Wealth Management

Sugey Piedra

Certified Tax Preparer and co-founder of Prominence Business & Wealth Management

Sugey Piedra is an enrolled agent and 20+ year certified tax preparer.  She is a co-founder of Prominence Business & Wealth Management, which supports high-earning, service-based business owners achieve long-term wealth through a holistic approach to financial services, providing bookkeeping, tax preparation, tax planning strategies under one roof.

She also hosts and produces Tax Talk with HeyHey Podcast, where they provide insights into business taxes, wealth building and what it means to really create financial freedom.

Where to reach Sugey:


Instagram: @ProminenceBusiness

Tax Planning Strategies helps you keep more money

How to Build Wealth and Lower Your Tax Liability with Tax Planning

First, let’s talk tax planning strategies. Tax planning is often perceived as a complex and opaque process. However, Sugey breaks down these complexities, illustrating that a well-informed approach to taxes can lead to significant savings. Therefore, by understanding the intricacies of tax returns and strategically navigating the available options, individuals can retain more of their hard-earned money. This proactive engagement with tax planning is not just for the affluent; it’s a potential game-changer for anyone willing to invest the time to learn and apply these strategies.

Lower your Tax Liability with Real Estate

Creating tax planning strategies helps reduce tax liability in real estate investing

Secondly, one of the best tax planning strategies to lower your tax liability is through owning real estate properties. Real estate investing is a great way to do just that! The many tax benefits and deductions that you get with real estate investing is why it makes it a popular way to lower your tax liability and build wealth. Sugey highlights the importance of real estate investing as a cornerstone of many investment portfolios. For example, you can leverage tax benefits such as reporting rental income and deductions like depreciation.

As a result, these tactics can reduce taxable income and, in turn, lower tax liabilities. The distinction between tax evasion and legal tax avoidance is crucial; understanding this can protect investors from legal repercussions while optimizing their financial opportunities. Sugey shares how even W-2 individuals can benefit from real estate investment, which not only appreciates over time but can also offer tax advantages.

Tax Planning Strategies with your Business

Man creating tax planning strategies for his small business

If you have a business, tax planning strategies are a must! As a business owner, you want to plan your deduction and credits at the beginning of the year. Sugey, shares how many businesses fail to be proactive with their taxes. This makes it very difficult to help them when tax season is here. She states how planning ahead can keep your money in your pocket or in your business, instead of handing it over to the IRS.

Additionally, separating business and personal finances is a vital financial move. This one of the most common mistakes small business owners make! It’s essential to treat your business as an independent entity to prevent issues like IRS audits. This separation allows for clearer financial practices and strategies that can maximize income while minimizing tax liabilities.

Taxes and Estate Planning

A black couple learning about Tax Planning Strategies to reduce tax liability

Finally, estate planning and wealth transfer are often overlooked aspects of financial planning. Yet, they are critical for ensuring that assets are distributed according to one’s wishes, potentially protecting wealth across generations. Sugey discusses setting up trusts and understanding LLCs as actionable strategies for safeguarding one’s financial legacy. She also shares how we should also create a plan to reduce the tax liability of our beneficiaries.

” It’s not about how much money you make but what you do with it.”

-Sugey piedra

Tax Planning is not just for the rich

Sugey dropped some valuable, actionable and transformative knowledge in this podcast episode. As Sugey puts it, “it’s not about how much money you make but what you do with it.” Strategic tax planning and investment can create a robust financial foundation, allowing individuals to break free from the paycheck-to-paycheck cycle and build a legacy of prosperity.

The wealth of knowledge shared by Sugey Piedra is invaluable for anyone looking to enhance their financial understanding and lower their tax liability. Her dedication to educating clients transforms not only individual financial situations but also contributes to changing the industry standard. With the right information and tools, the dream of financial freedom and generational wealth is well within reach.

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