Tax planning is the process of arranging your financial affairs in ways that avoid or postpone taxes. By partnering closely with you and your tax advisor to craft a plan, we can employ appropriate and effective tax strategies to either reduce or defer taxes, maybe even both. This will hopefully give you more money to spend or save for future goals.
One of the first steps in Financial Planning is to help our clients get a good handle on their current tax liability. In other words, doing our best to legally avoid or defer taxes by taking advantage of beneficial provisions in the tax-law, making maximum use of applicable deductions and tax breaks under the Internal Revenue Code. Of course, we do not suggest that you change your financial behavior solely to reduce taxes. This is the reason for working with you and your tax advisor.
The “Planning” part is an on-going process because the tax rules are constantly changing. The most recent legislation, the Tax Cuts and Job Act of 2017 changed the tax rules significantly. In fact, this was the largest overhaul of the tax code since 1986 under Ronald Reagan. While the federal income tax rules are now more complicated than ever, the benefits of good tax planning can potentially be more valuable than ever before.
Tax planning and financial planning are closely linked because taxes are such a large expense as you go through life. In fact, taxes can be the single largest expense of your life! So, working to reduce them can be a critically important piece of the overall plan because taxes are dynamic and constantly evolving. Changes to tax laws, financial markets and most importantly, your personal situation, will affect your goals and your tax liability.
So, are you reducing your current & future liability? Are you ready to schedule a consultation with us that will start the conversation to make sure you do have control of your tax situation!