Tax planning is the analysis of all the factors at play in a person's financial situation to minimize the amount of taxes owed. This is an important activity for individual investors, business owners and ordinary people too.
Do you have investments in stocks or commodities?
Or do you have an IRA or 401(k) that you make regular contributions to?
Congratulations! Tax planning can help you!
Tax planning takes into account your income, investments, retirement plans, purchases and plans for future expenditures to help you owe the IRS less and keep more of your money. For example, if you invest a portion of your income into an IRA or 401(k) retirement plan, how much should you invest and when to get the best tax break bang for your buck? Tax planning helps you figure out that number ahead of time so you can leverage that information to help reduce the taxes you owe.
Another example, let's say you have invested in some stocks or commodities. Tax planning helps you with tax gain-loss harvesting by using the losses in your investment portfolio to offset your gains (also called capital gains). Offsetting your gains reduces your positive income from investments and helps you pay less in capital gains taxes. It really is all in the planning!
Tax planning DIY-style can be hit or miss. You want a knowledgeable professional to guide you on your tax planning to help ensure you're getting all the reductions and deductions possible. You can trust BIG Accounting and Tax Services to help you with your tax planning. We work with you to offset part of your income to reduce what you owe in taxes by planning strategic contributions to your IRA or 401(k) at the right time in the right amounts. We also help you offset your capital gains with your investment losses so you owe the IRS less. Ready to get started with your tax planning? Contact us today!