Taxes got you stressed? Is Tax Planning the Answer?
Many people, including tax professionals, need to understand the term and realize that tax projections and planning differ.
Tax projections estimate your taxable income for the year based on your current income and expenses, while tax planning goes beyond this by analyzing your entire financial situation to make sure all elements are working together to minimize your tax burden.
That is why we want to clarify 3 common misconceptions regarding tax planning.
#1- What is tax planning?
Answer: Tax planning is finding strategies to legally reduce your taxes based on your circumstances, lower your tax bill, and keep more hard-earned money. It is not about cheating the system but rather paying only what you owe by taking advantage of all available credits and deductions.
#2- Is tax planning legal?
Answer: Yes, tax planning is a legal way to reduce your taxes by finding strategies that are allowed under the law. It is not the same as tax evasion, which involves failing to pay what you owe to the IRS. Instead, tax planning is a smart way to pay only what you owe and maximize your tax savings.
#3- When is the best time to start tax planning?
Answer: The earlier, the better! It’s generally best to start tax planning before the end of the year, but even if you miss that deadline, it’s never too late to start. You can start tax planning at any time, and the key is to give yourself enough time to implement strategies before the deadline.
Don’t let misconceptions about tax planning hold you back. Schedule your tax assessment with us today to learn more and take control of your tax situation. Take action now to minimize your tax burden.