Benefits of tax planning

Could you benefit from tax planning?

Do any of these apply to you? 

  • You dread tax season because the number is a surprise. It could be a good surprise or a bad surprise, but it’s a surprise. 
  • Finding all of your records is a huge hassle, and you’re not sure if you kept all of the necessary records. 
  • You are frustrated when you hear that there were steps you could have taken to lessen the tax bill, but you didn’t know in time. 
  • You’re worried that you don’t know what you don’t know. 
  • You have an income. 

If you answered yes to any of the above, here are eight ways you may benefit from tax planning. 

#1 better decisionsAllows you to make better-informed decisions 

Part of tax planning is organizing your financial information. This includes creating a statement of cash flows and a balance sheet. The statement of cash flows allows you to determine all of your sources of income and all of your expenses. Your balance sheet shows all of your assets, all of your liabilities, and your net worth. Now you can see which assets make money and which cost money. 

 

#2 better control gives you better control over your cash flow 

Rather than being surprised in April you can anticipate and make appropriate plans for your cash flow. 

 

#3 less anxietyLessens anxiety about your finances at tax time 

Stress and anxiety during tax season are common due to fear of the unknown. Fear of a large tax bill, fear that you could be completing your tax return incorrectly, fear that you may be paying far more or far less than you should be. 

 

#4 Benefits of tax planningMay allow you to keep more of your money this year 

Taking advantage of common deductions such as contributions to retirement accounts can reduce your tax bill and keep more of your money in your name. Appropriately locating investments in accounts that get preferential tax treatment versus taxable accounts could save you money this year. 

#5 benefits of tax planningMay allow you to keep more of your money over time 

Understanding your current and projected future tax situation allows you to make better decisions about saving, investing, and employer benefits such as deferred compensation plans and health savings accounts, which can provide long-term benefits.

tax planning benefits over time

 

#6 benefits of tax planningMay head off future issues 

Without planning, some taxpayers may find themselves in a difficult position in their retirement years – creating a larger tax burden in the future by deferring too much today. 

 

#7 benefits of tax planningGives a head start on estate planning 

Tax planning is a large part of estate planning and a significant part of comprehensive financial planning. 

 

#8 benefits of tax planningMay allow you to employ valuable strategies 

There are tax strategies that have specific requirements, such as time restrictions or trading or ownership restrictions on investments.  Without a long-term plan, you may unnecessarily forfeit your ability to employ these strategies by acting with only a short-term view. 


This article is intended to be educational and thought-provoking rather than financial advice. When we work together in a financial planning engagement, we discuss your unique personal situation and your unique goals. We examine these factors and many others during our financial planning process to determine appropriate financial strategies for YOU.

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