Effective tax planning can significantly benefit your financial situation. In these times, it is an absolute necessity to pay close attention as you shape your future tax and wealth preservation strategies. It is also important to have the best tax professional available to you. Most people either don’t do any advanced planning or wait until the last minute to try in effective strategies to reduce their taxes.
Advanced tax planning is the process of projecting your tax liability ahead of time, reviewing your current situation preferably with a help of a professional to uncover strategies that can reduce your current or future tax liability.
By planning ahead and being proactive, you have endless possibilities’ to reduce your taxes.
Three Reasons why you should prioritize Tax planning:
Self-employed or a business owner
Have investments in more place than one
Have a change in your current situation(income, marriage or divorce, child, retirement) Have moved to a different country or state
Most tax planning should begin in October or November but if you have a complicated tax scenario, start early. While some tax planning strategies can be accomplished in short order at the last minute with consultation, most require much more time for proper analysis and implementation by the tax professional.Annual Tax Law Changes
The federal government changes tax laws every year. Oftentimes the changes are minor and sometimes they are major but no matter the number or type of the law changes, the result is that what’s true on December 31st of one year may not be true the next day. Being proactive gives you the ability to benefit from the changing environment. The more informed you are on expiring tax laws and potential new laws the more equipped you’ll be for tax planning.
Most tax planning ideas become useless on the first day of the year. No matter how many great ideas you or your planning professional has, most action items are required to be done before the end of the year. So act now and contact a tax professional for scheduling a tax planning consultation.