Tax Planning – What is it? Why is it important? 3 Tax Planning Strategies for Savers and Investors

On This Video:

Do you know what one of your biggest expenses may be in retirement?  Taxes!  In this video I talk about the difference between Tax Preparers and Tax Planners (and why you might need both!), what tax planning is and why it is important, and the tax planning strategies you can consider.

Things To Consider:

Do you think taxes will go up in the future?  There is over $28 trillion in US Debt and has been over $6+ trillion in COVID stimulus packages approved by Congress.  Some would say it is not “if”, but a question of “when”  taxes go up.

If, or when, taxes go up, that just means more money taken from your paycheck, from your retirement withdrawals, your profits, your interest and your dividends.  That’s why tax planning strategies to help reduce your short-term and long-term tax burden can become very important to help keep more of your hard-earned money with you instead of going to the government in the form of taxes.

You might be thinking that you have a tax person, a CPA, an Enrolled Agent, or a tax consultant (and there are a lot of great tax preparers out there).  However, these professionals are typically focused on tax preparing, not tax planning.  Meaning they are helping you record history, as in what took place in the previous year and what you may owe the IRS.  While you might expect them to be thinking of the future, without having a complete view of your entire picture (assets, portfolios, retirement and non-retirement investments, future income sources, and other elements) they are not able to properly guide you regarding the future.  That’s where the role of tax planning comes in.

In this video, we’ll take you through why tax planning can be important, what tax planning is, and the difference between tax preparing and tax planning.

In addition, the video covers the 3 tax buckets that your money might be sitting in.  Plus, 3 of the many strategies that we walk through with clients to help them keep more of their hard-earned money in their pockets.

  1. Tax Diversification
  2. Tax Efficient Investing
  3. Re-positioning Funds between Tax Buckets

When it comes to taxes, there are 2 options.  You can become complacent.  Or you can be proactive.  In our opinion, being proactive can potentially put real savings into your pocket.