Tax Time
“Nobody owes any public duty to pay more than the law demands: taxes are enforced exaction, not voluntary contributions.” - Judge Learned Hand, 2nd Circuit U.S. Court of Appeals
Tax time… Few people look forward to it, but for most it is an inevitability. I am here to tell you that it doesn’t have to be hard. We can help you meet your tax obligations while legally maximizing your deductions and income deferrals. However, effectively reducing your tax liability is not accomplished when preparing and filing a tax return. It is accomplished through proper tax planning.
Tax Planning starts now. Taking steps to reduce your tax liability should be done prior to year-end and should be a part of your long-term, on-going financial plan. By maintaining consistent communication with your tax adviser, you can be more aware of your options and prevent nasty surprises at tax time. The more complex your financial and tax situation is, the more important your tax planning strategy becomes. However, even “simple” tax returns can offer tax planning opportunities.
Tax Planning also helps with overall financial organization. Understanding your income and expenses as they related to your tax return can also lend to better decision making for saving, budgeting, and investment. Individuals and businesses can benefit from managing their finances more wisely and not only through savings.
A good tax planning strategy can also help prevent unnecessary penalties, interest, and fines. Changes in your income also lead to changes in tax liability. Failing to account for these changes and missing estimated tax payments can lead to under-payment penalties. This can exacerbate an already difficult tax situation and lead to a cycle of “playing catch-up” and never getting ahead.
Here are a few quick tips to begin your tax plan:
- Inform your tax adviser of any changes in employment or income situation.
- Consult with your tax adviser prior to sales or purchases of major assets.
- Consult with your tax adviser prior to withdrawing from retirement accounts (401K, IRA, 403b, etc.)
- Ask your tax adviser for a tax projection.
- Call us to see how we can help!
We understand that this is already a lot of information, and every taxpayer has a unique tax situation. Don’t wait until the last minute to start your tax plan. Contact us. We look forward to hearing from you!
