Issue 15.16
Because Tax Day is fast-approaching, there’s not much time left to file your taxes if you haven’t already. If you have, don’t file those taxes away in your records just yet. I want to talk to you about how you can use that information to reduce your taxes in future years. First, let’s talk about the difference between tax preparation and tax planning.
Tax preparation looks at what you’ve done the past year. You bring your CPA or other tax professional a pile (or hopefully a nicely organized folder) of information about what you’ve done over the last year to see what credits, deductions and exemptions you may be eligible for.
Tax planning, on the other hand, looks towards the future. Tax rates may be going up so it’s more important than ever to do proper tax planning.
There are 7 key areas on your tax return you can review that can potentially reduce your income taxes going forward. One of those areas is your investments. Are your investments in taxable accounts? How much more tax-efficient would they be if they were in tax-deferred or tax free accounts? Another area might be planning ahead for your RMDs (Required Minimum Distributions), or if you’re already 70½, you could look at strategies that could potentially reduce the overall taxes you pay without placing you into a higher tax bracket.
Are you curious about how you can reduce your taxes by reviewing the 7 key areas on your tax return? Our average client saves $2,500 a year. Think about what good that money could do in your pocket vs. the IRS’s. Before you file away 2015’s tax information, call our office at (435)773-9444 and schedule a time to sit down with one of our tax guides to determine what you can do going forward to possibly save money on taxes.