What is tax planning?
Tax planning is the analysis of a financial situation or plan from a tax perspective. The reason why its important is to ensure efficiency when planning financially, reducing tax liabilities, and maximizing your eligibility for retirement planning. These elements are crucial for success.
When we discuss planning together, we consider many factors:
- The timing of income
- Filing status
- Common deductions
- Different types of retirement plans available
You can reduce your taxes by using a retirement plan. Some possible options include a traditional IRA, which can reduce your gross income amount (if qualifications are met). The remainder going to the IRA would be invested and tax-deferred until retirement.
Another plan to reduce tax liability is the 401(k). This may be more popular if you’re a larger business and you may contribute more money to a 401(k) plan than a traditional IRA.
Tax planning is all about being prudent. You’ll want to brainstorm how to achieve the following goals when discussing retirement planning with our tax experts:
- Getting out of debt
- Having an emergency reserve
- Developing a financial plan
- Discussing how to make more money
- Minimizing investment fees
Our team wants to get you on the right path as soon as possible. Discuss tax and retirement planning with us now.