When it comes to advanced tax planning, unfortunately many people either just don’t do it or they wait until the last minute only to find out that there aren’t any options to take advantage of at the point of filing their tax return. By developing an advanced tax plan, you will be able to forecast your tax liabilities ahead of time which allows your CPA to discover strategies that can help to reduce your future tax bill. Not convinced? Following are 4 reasons why tax planning is so important:
- Would you enjoy paying less taxes overall? (That one is probably pretty obvious.)
- Is developing your tax reduction strategies ahead of time worth it if it allows you to maximize their benefits? (While some game plans to reduce taxes can be done in short order, many require a lengthier amount of time for proper execution.)
- Time is your friend when it comes to changes in the tax laws. (What is true on December 31st of one year may not be true 12 months later.)
- Tax reduction strategies have a strict deadline. (Once the ball drops and you are puckering up for that New Year’s kiss, a majority of tax planning ideas become pointless as they needed to be done before the end of the year.)
Remember, tax planning is a completely different concept than filing your taxes. Tax filing is simply preparing and sending in your tax return to the IRS by the deadline to ensure you are paying your taxes legally and correctly. Tax planning helps you make sure that you are paying your responsible share of taxes and not a penny more. However, a General Accountability Office study done over a number of years showed that 2.2 million taxpayers who filed by taking the standard deduction overpaid their taxes by close to $1 billion!* Advanced tax planning allows the time to break down past tax returns in order to find opportunities to lower the amount of taxes owed in the future. What could you do with extra money in retirement? Would you invest it? Take that dream vacation? Purchase and restore your first automobile? The ideas are endless!
The beginning of the year is a great year to start your tax planning and tax reduction strategies. Our CPAs are prepared to discuss your tax situation and determine if you have tax planning opportunities that could benefit you and your retirement in the long-run. Request a meeting to review your tax situation by clicking below.
If you’re not quite ready to come in and talk with someone about your tax situation we completely understand that’s why we offer a variety of education materials on tax planning on our Tax Planning Education Center. You can also fill out the form below to get your copy of Tax Reduction Strategies to start building your tax planning strategy from the comfort of your home!
Investment advisory services offered through Barber Financial Group, Inc., an SEC Registered Investment Adviser.
The views expressed represent the opinion of Barber Financial Group an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Barber Financial Group does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.