Taxes are a part of life; they impact almost every part of our lives. Earning monies, operating a business, making purchases, owning real property, and so many other life experiences we encounter affect our taxes. Proper planning and organizing of one’s financial matters in order to minimize taxes can mean huge savings! This is the objective of tax planning.
Many taxpayers wait until tax season to begin thinking about their taxes. Throughout the year there are a multitude of financial decisions that can be made to reduce the amount of taxes owed. This is a great opportunity to catch those easy to miss or commonly miscalculated items such as key tax credits, retirement plan contributions options, investment rules, and income exclusion rules. With the tax laws constantly changing every year, these items will most certainly be affected along with your spending, saving, investment and borrowing decisions.
Ultimately, tax planning is the process of organizing your finances in such a way to be most advantageous to you, allowing you to keep more of the money that you earn each year or defer into the future. Everyone has a different financial situation that requires different tax strategies. Strategies for deferring or splitting income, deferring or maximizing retirement contributions, capital gains or losses, property ownership, and charitable giving are applied differently in each situation, so they must be developed specific to your needs.
The effective application of tax planning and tax strategies can save you hundreds or possibly thousands of dollars in tax savings each year. It is highly recommended to seek guidance from a financial professional with experience in tax planning strategies for minimizing personal income taxes.
Please contact us today to begin your tax planning!