Tax Planning Services
The goal of tax planning is to reduce your taxes as much as possible without compromising your other goals. It is a process that provides a way to take control of the taxes you pay rather than passively allowing Uncle Sam to take more than is necessary. Tax planning services are critical to any retirement or financial plan because taxes can be a crushing burden if not managed properly. Sadly, most people don’t realize they can control their tax burden, and they pay too much.
Tax Planning Services
The goal of tax planning is to reduce your taxes as much as possible without compromising your other goals. It is a process that provides a way to take control of the taxes you pay rather than passively allowing Uncle Sam to take more than is necessary. Tax planning services are critical to any retirement or financial plan because taxes can be a crushing burden if not managed properly. Sadly, most people don’t realize they can control their tax burden, and they pay too much.
Be Proactive, Not Reactive
The amount of taxes you pay does not need to be determined after you file your tax return. That is a reactive approach. Instead, you can be proactive, looking forward towards the beginning of a year or even at the beginning of a new stage of life to decide what taxes you can legally avoid.
The tax code is not as specific and rigid as you probably think. Most tax laws are written broadly and delegate to the IRS the job of interpreting the law, defining keywords and phrases, and writing specific regulations, which are then applied to determine what your taxable income is, what your deductions are, what credits are available to you, and ultimately how much you pay in taxes. You can use those rules to your advantage, and in many instances, you are allowed to make your own interpretation of what will be taxed. You have more power than you think.
Our Tax Planning Services
Our tax planning services can drastically decrease the amount of taxes you pay. The key is finding the right tax strategies that meet your specific financial situation and stage of life. If implemented correctly, tax planning can help you reduce taxes today and the amount you pay in the future.
- Utilize Tax Reduction Strategies
- Balance Your Goals
- Plan for Today and Tomorrow
- Formalize Your Tax Plans
- Implement Strategies Correctly
Utilize Tax Reduction Strategies
Many tax reduction strategies are hiding in plain sight. Most people know about IRAs, 401Ks, Health Savings Plans, etc., but many don’t take advantage of them. You must start some of these tax planning strategies at the beginning of a year and complete others at a certain time. You need to get that right.
Not all of these tax strategies are right for you. You must take advantage of the strategies that make sense for your situation each year. Little steps you take at the right time can significantly affect your income, capital gains, and estate taxes. However, using the wrong strategies may actually hurt you more than they would help you.
Balance Your Goals
Many of your goals contradict one another, and this is especially true in the area of tax planning. Reducing taxes too much may actually hurt your ability to refinance your mortgage or pay for your children’s college education. Sometimes, tax strategies are too complicated or too expensive compared to the amount of taxes you can save.
As you take control of your taxes, don’t let the tax tail wag the financial dog. Make sure that you identify all your goals, rank their priorities, and decide on the right combination for you.
Plan for Today and Tomorrow
Tax planning should examine what can be done this year and over the next several years to identify areas where changes will reduce your tax exposure for years, or even decades, to come. Analyze the sources and timing of your income, how you incur expenses, where you put your growth assets, etc. There are lots of areas where you can reduce your taxes down the line.
Don’t limit your thinking and tax planning to the current year. Look ahead to the next several life stages and consider what tax strategies will help you today and tomorrow.
Formalize Your Tax Plans
Because tax planning spans so many years and several phases of life, you can’t rely on a back-of-the-napkin approach. Nor should you trust your memory to remember what you plan on doing next year or next season.
A good tax plan needs to be written down, listing the key assumptions, identifying the potential tax strategies, and estimating the expected tax savings available. If you don’t understand what your taxes will be without tax planning and how much you can reduce them, you’ll never be able to make the best decision.
Implement Tax Strategies Correctly
Even the best tax plan in the world will become worthless without correct implementation. The tax regulations developed by the IRS are often very, very specific—often irrationally so. Some tax planning strategies must be executed within a certain date range, while others require filing specific forms.
If you don’t execute a tax strategy correctly, the consequences are often worse than just the tax you tried to avoid. The IRS can be very punitive in the penalties and interest charges it assesses on badly executed tax strategies. You must take the right steps in the right way and at the right time. This is not the time to be a do-it-yourselfer.
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Why Work With Us?
Tax planning is probably the most complicated area in which we help clients. Decades of compilation, internal contradictions, and constant changes have shaped the tax code, making effective tax planning impossible for an amateur.
Working with a skilled and experienced tax planning advisor can dramatically reduce your tax burden, help you balance all your goals, and ultimately improve your overall financial or retirement plan.
First Financial Consulting has always provided tax planning to our clients. Because we are holistic in our retirement and wealth planning, we make sure we assess the tax consequences in any plan we develop for our clients. We have a long and successful track record of integrating all parts of a successful plan to deliver our clients the best possible after-tax outcome. We are keenly aware that it “isn’t what you make that’s important; it’s what you keep.”
We don’t want the IRS to take one dime more than necessary, but we also want to balance that goal against others and ensure that our clients don’t have to worry about their taxes or the IRS.
Finally, because we are fiduciaries—providing clients with 100% objective advice—our clients never have to worry that our tax planning services will be an excuse to sell financial products, insurance, or annuities. Our fee-only, fiduciary approach means we always act in your best interests.
Hire A Tax Planning Advisor You Can Trust
Obviously, you want an experienced advisor—a firm that has done this type of planning before. In our 45+ years of experience, First Financial Consulting has seen income tax rates in the punitive 70% range; we’ve seen them drop significantly from there and creep back up again. There have been times when the income tax rate was better than the capital gains tax rate and vice versa. We’ve seen estate tax rates vary from 70% to 0%.
In other words, we’ve helped clients navigate and manage their tax exposure during radically different time periods. Our tax planning services are time-tested and have helped clients keep more of their hard-earned money.
Beyond experience, though, it is important to work with a fiduciary advisor. Being a fiduciary means that we provide our clients with 100% objective advice. We never try to sell financial products as an excuse for tax planning. We do the hard work, not the sales work.
Tax Planning FAQs
Take Control of Your Tax Burden
Nobody likes paying more in taxes. To mitigate some of these taxes, ensure you use the right strategies for your unique situation. Schedule a Complimentary Consultation with one of our Tax Planning Advisors Today to see the best options available to you.
Protect Your Future
Your legacy goes far beyond your assets. Ensure that legacy carries on through future generation. Schedule a Complimentary Consultation with one of our Estate Planning Experts Today.