In recent times, there has been a substantial migration of New Yorkers heading to states like Florida and Texas, aiming to take advantage of the favorable tax climates these states have to offer. The exodus has led to a burgeoning concern over New York’s taxation system and its impact on residency. To delve into this issue, we sat down with Jonathan Bander and Robert Cannon, both esteemed partners at ExperityCPA, a leading tax and accounting group based in New York, to discuss how better tax planning can encourage New Yorkers to stay within the state.
New York’s City Attraction
With his 25+ years of experience in corporate accounting and taxation, Jonathan Bander emphasizes the importance of adequate tax planning. “Effective tax structuring and planning can play a pivotal role in financial stability and wealth accumulation,” Bander said. “New Yorkers have much to gain from a properly orchestrated tax strategy that aligns with their financial goals and circumstances.”
Robert Cannon, an acclaimed financial expert and Amazon Best Selling Author, shares insights on how efficient wealth protection and growth strategies can help retain residents. “New York has its charm and offers extensive opportunities for businesses and individuals. By minimizing tax exposure and leveraging the available financial strategies, New Yorkers can optimize their income and enjoy the benefits of living in such a dynamic state,” Cannon remarked.
Both Bander and Cannon share a collective view that New York’s potential for economic prosperity is undeniable. The state offers immense opportunities and a vibrant community that’s hard to replicate. With the establishment of ExperityCPA, Jonathan aims to offer an integrated approach to tax, legal, and financial advisory, bringing together wealth advisors, lawyers, estate planners, and insurance providers to cater to clients’ diverse needs.
Bander is adamant that New York holds distinctive advantages. “The connectivity and the eclectic mix of people and businesses in New York are unparalleled. These aspects, coupled with well-rounded tax planning, make it a desirable location for many national and international clients,” he emphasized.
Cannon reflects on the importance of understanding and leveraging the available financial strategies. “Ensuring a secure financial future is about adapting to the available tax advantages and creating a protective financial environment,” he pointed out. “This is where our role becomes crucial. We guide clients through optimizing tax benefits, safeguarding their assets, and facilitating growth.”
Tax Credits and Tax Deductions
The first area New Yorkers should look at are tax deductions and tax credits, according to these two experts. Bander, starts the conversation by highlighting the importance of maximizing deductions. “By utilizing all available tax deductions, including those for state and local taxes, New Yorkers can significantly reduce their taxable income. For instance, if you’re a homeowner, the property tax and mortgage interest deductions are invaluable,” explains Bander.
In the same vein, Cannon emphasizes the vital role of tax credits. “They are essentially a dollar-for-dollar reduction of your tax liability. The Earned Income Tax Credit, for example, can offer substantial relief to individuals with lower to moderate income,” Cannon illustrates.
How an individual distributes income could also positively impact their tax obligations, and these two have some enlightening suggestions. Bander suggests exploiting tax-advantaged accounts, while Cannon also feels income-shifting can further compound the rewards.
“Investing in such accounts like 401(k)s and IRAs is crucial. They not only help in lowering the current taxable income but also secure a financial future. It’s about prioritizing oneself while enjoying concurrent tax benefits,” notes Banda.
Expanding on Bander’s points, Cannon delves into the strategy of income shifting. “It’s a legitimate means to lower a family’s overall tax burden. Allocating income to family members in lower tax brackets allows families to retain more of their earnings through a lower collective tax rate,” he expounds.
Investments and Estate Planning
According to these two, investments and estate planning are also areas with sufficient tax-saving opportunities. For Bander, municipal bonds are an underutilized resource. “New Yorkers can garner a stream of income that is largely tax-free, thanks to the exemptions from federal, state, and possibly local taxes on the interest earned from municipal bonds,” Bander touts their benefits.
Reflecting on Bander’s insights, Cannon provides a reminder of the essence of managing capital gains strategically. “Timing is pivotal when selling assets. By qualifying for long-term capital gain rates, which are generally lower than short-term, New Yorkers can manage their assets mindfully and enjoy lower tax rates.”
Cannon further emphasizes the role of estate planning strategies. “Utilizing trusts and gifts not only ensures more wealth is retained within the family but significantly reduces the burden of estate and gift taxes on heirs,” he remarked.
Even while doing this, a correct assessment of the property is necessary, and Bander feels most New Yorkers usually assume and overlook this foundational step in tax planning. “Ensuring that your property is accurately assessed can lead to significant tax savings, reducing unnecessary financial strain over time,” he asserts.
The Need for Professional Help
Finally, Cannon stressed the irreplaceable value of professional advice in tax planning. “Engaging with knowledgeable professionals enables New Yorkers to make informed, individualized decisions aligned with their financial aspirations.”
Both experts concur that a shift in perspective, coupled with strategic tax planning, can alleviate the concerns surrounding New York’s taxation policies. This shift is a pathway for residents to revel in the opportunities and experiences unique to New York while maintaining financial efficacy and stability.
Bander concluded, “It’s our objective at ExperityCPA to extend our proficiency in domestic and international tax matters to ensure that our clients can benefit from the exceptional offerings of New York, without feeling the financial pinch extensively.”
Robert Cannon added, “By adopting resilient and efficient wealth protection strategies, New Yorkers can indeed find a balanced and prosperous way to enjoy the best of both worlds.”
In the face of ongoing migration for tax relief, the insights from Jonathan Bander and Robert Cannon shine a light on the possibilities for financial optimization within New York, potentially offering a compelling reason for residents to stay and flourish in this iconic state. The collaboration of knowledge and experience from experts like Bander and Cannon at ExperityCPA provides more than just hope for individuals and businesses seeking to make the most out of their New York residency.
