Accelerated Deductions in Tax Planning

With more than a decade of experience in the finance sector, Travis Hansberger has built expertise in the area of wealth management. The president of Millstone Wealth Management, Travis Hansberger offers a number of financial services to clients through his firm. One of these services is tax planning.

There are several techniques or strategies that are used in tax planning.

One of these is accelerated deductions. An accelerated deduction means making purchases at an earlier date than strictly required in order to avoid paying higher taxes.

Higher taxes are usually charged on income that go beyond a specified tax bracket. As an example, let’s assume that any income beyond $100,000 will be subject to higher taxes .

This means that a person or company making $150,000, will be paying higher taxes on the last $50,000 earned. Let’s further assume that the person or company is in the fourth quarter of the current fiscal year, with taxes due on April 15 of the next year.

There are two options: The first one is to do nothing and pay the tax in April. The second option is to find accelerated deductions and save on paying the taxes on the $50,000, which would be taxed at a higher rate than the first $100,000.

Accelerated deduction is done by making tax-deductible purchases before the end of the fiscal year. Typically, these would be useful supplies for the business. By making these purchases early, deductions can be made against income so that taxable income for the year will come in under the sum where the higher rate kicks in. The person or business will then have the dual benefit of making essential purchases while paying less taxes.

Kansas State Business Summer Camp

A resident of Wayzata, Minnesota, Travis Hansberger has been a certified financial planner for 11 years, having opened his own firm, Millstone Wealth Management, in 2020. Prior to his career in financial planning, Travis Hansberger attended Kansas State University where he earned a degree in personal finance.

Alongside its degree programs, the College of Business at Kansas State offers high school students the chance to learn more about business through its College of Business Summer Camp. The camp is geared toward students in their sophomore year (tenth grade) and older, and is designed to help them become acquainted with careers in the industry, in addition to giving them insight into the college experience.

The summer camp is a three-day, two-night intensive event introducing the students to the business school and campus life. During the camp, students are encouraged to explore leadership skills and the various disciplines offered at the College, such as management, marketing, accounting, and finance. Much of the information the students receive comes from discussions with instructors, team collaboration, and field trips to local businesses; this helps them establish connections to utilize later in their careers. Even after they complete the summer camp, the participants continue to have access to specialized events through the College of Business. 

Cybersecurity for Financial Planners

A Certified Financial Planner (CFP) with more than a decade of experience, Travis Hansberger owns the independent firm Millstone Wealth Management. Engaged with his industry and his peers, Travis Hansberger is a member of the Financial Planning Association (FPA).

FPA is a membership organization for professionals in the financial planning industry interested in advancing their careers and promoting excellence in the profession. Near the end of 2020, the association launched Cybersecurity for Financial Planners, an FPA certification program.

The FPA certificate program guides industry professionals in the development of a long-term and customized cybersecurity plan to help protect their client’s data. This program was made necessary after the significant increase in security breaches experienced by financial services firms in 2020.

Topics examined in Cybersecurity for Financial Planners include policy ownership and creation, risk management and risk assessment, and information that falls under Non-Public Information. It is broken down into six sections, namely Introduction to Cybersecurity, Program Controls, Process Controls, Data Controls, Technical and Physical Controls, and What is a Cybersecurity Program?

Those who complete the course receive a completed cybersecurity plan for their firm and a digital certificate of completion. CFP's also earn continuing education credits.

The Importance of Planning ahead for Closely Held Business Owners

Travis Hansberger guides Millstone Wealth Management in Minnesota as president and works with clients in tailoring investment portfolios to tax and financial planning objectives. Working closely with small business owners, Travis Hansberger emphasizes the importance of developing robust succession plans that ensure the seamless transfer of companies to the next generation. He also assists clients in situations where selling the business ultimately makes the most place.

With fewer than one-fifth of family businesses devising a well-planned and communicated succession plan, pitfalls abound. Relationships among family members can be complex and contentious, and not every business owner has a diligent and savvy relative or adult offspring capable of taking over the reins. In such situations, one strategy may be to reduce the paper value of the company, doing so in ways that ease the tax burden.

Alternatively, the business may find a willing buyer in partners, managerial employees, and outside parties. The key here is to work to bring the balance sheet to its maximum potential before the business is placed on the market. For those unable to find an active buyer who offers an attractive price, another option is to close the company and liquidate assets. In such situations, patience is the key, as monetizing the closely held business can be a protracted process. The bottom line is that it makes sense to find a qualified investment advisor with the knowledge to assist in drawing up the best possible succession plan.