Year-end is upon us again! Time to celebrate the holidays with family and friends, set those new year resolutions and of course do some tax planning!
Is tax planning a must? That is an excellent question and depends on your strategy to expand and grow your business and wealth. BGMF CPAs always recommends tax planning in your strategy.
Waiting to plan when you file your taxes is not a good course of action. There isn’t much to do at that point to ensure you don’t overpay. It’s your money, not the governments and the tax law is written primarily to reduce your taxes.
Taxes are stealing your money (sometimes up to 50% or more), time and future so now is the time to stop the bleeding. Ever wonder where your money goes? We’ve seen a lot of changes in tax laws the last decade and we find that many tend to ignore the realities. This is due to a variety of factors, such as not understanding the tax code and how to make it work for them or trying to plan alone.
I’ll have you consider that the tax law is a map to vast amounts of wealth. If you follow the law carefully, you will be shocked to uncover secrets within the code which can allow you to amass huge amounts of cash flow and wealth. The reason for this relates back to the government wanting the economy to grow through investment and spending in various sectors.
What you make is important, but even more so is what you keep. That is where your advisors come into play. A high-quality advisor will help you navigate the tax code to keep more of your hard-earned money and make better investment decisions.
Taxes Are a Major Expense & What You Can Do to Save
Consider that taxes are one of your biggest expenses and too many people ignore taxes in their strategy. When you meet with our tax planning team, we’ll look at a variety of factors, but we’ve boiled tax savings into a few different categories; type of taxpayer, changing the year, type of income, changing the deductions.
As a business owner or investor, we’ll review entity structure and if changing the taxpayer makes sense (i.e. switch to a C Corporation). We’ll also consider the year in which income and expenses occur to plan accordingly for deductions and credits. In addition, we’ll review type of income and deductions that are either being taken or not utilized. For example, are you truly taking advantage of all expenses that could be considered legitimate business deductions (i.e. travel, home office)?
As an individual, we’ll review your overall situation to determine where you can save in taxes. In addition, we’ll review any major changes in your life such as getting married, having children, buying a home, college planning, divorce, retirement or other. We’ll also discuss potential opportunities that may not be as apparent such as areas to invest, starting a business or taking advantage of deductions and credits that you may be missing.
We also work with your other advisors so everyone on your team is working in unison to keep money in your pocket.
How to Hire a Tax Advisor
When hiring an advisor to review tax planning with you, beware of those who promise to lower your taxes and cross the line to cheating. There are plenty of legal ways to reduce taxes with the right plan.
Tax advisors and CPAs come with a variety of skill sets and beware of advisors who aren’t willing to understand the code to utilize the tax saving strategies available. Ask a lot of questions and ensure you’re comfortable and confident with the team you’re working with.
In summary, we’ll leave you to consider this – taxes are unique to each individual and based on your specific facts and circumstances. Change those and you will change your tax!
In other posts, we’ll provide specific tax saving strategies, but this overview of why tax planning is important will help you take the right steps prior to year end to ensure you have the opportunity to save in taxes now!
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