What is Tax Planning?
Updated: Dec 12, 2022
What is Tax planning, and why do we need it?
Tax Planning:
Analyzing a financial situation and come up with a plan to pay the least amount of taxes possible. Tax planning ensures that most of the money you make stay in your pockets, instead of Uncles.
A big part of tax planning is to consider timing the income you receive, the size of the income and timing purchases.
Some tax planning strategies can be,
Retirement savings:
Purchasing a home
Charitable contributions
Example:
Let us say earlier this year you receive a raise from your job. It’s now Aug 2021 and you have tripled your income from last year. If you didn’t have proper tax planning, you most likely will owe a significant amount of taxes.
You may have had plans to purchase a home at the beginning of 2022, A better option would be to purchase that home by December 31st, 2021. This will allow you to claim many credits, and deductions related to the purchase of your new home when you file your 2021’s taxes.
Tax planning isn’t just for business owners, or the wealthy. Tax planning is for everyone. We can all benefit from it. If you live in the United States, there are taxes everywhere.
Taxes,
· At the grocery store
· Coming out of your paychecks
· Living in your house
· While selling products, the list goes on.
So, why not keep as much of your hard earned cash by investing into tax planning. Many will say it’s too expensive I can’t afford it, well it’s too expensive not to do it, so why not do something different to receive a better benefit. If you love giving uncle most of you hard earned cash, ignore this message.
If you are tired of not getting a refund, and overpaying taxes, invest in change and schedule a complimentary consultation.
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