Many people only think of taxes when they need to file for their yearly returns. This is not ideal. People who strive to achieve financial longevity need to implement a tax plan. By utilizing an evolving and customized tax strategy, you are able to control your future financial health.
At Bennett CPA LLC, we understand how overwhelming taxes can be. Thinking about the future and establishing a working plan to ensure long-term financial health is difficult to do alone. Let Merrill Bennett, a CPA in Colorado Springs, help you build an actionable strategy to maximize your returns and save you money.
What is a Tax Planning?
Before jumping into the benefits of tax planning for individuals, it is important to understand exactly what a plan is. Essentially, a tax strategy is a way for you to take control of your returns and save money in the long-term. In most cases, the main goal of a well-developed plan is to maximize the income you keep by minimizing the amount of money you pay to the IRS and other taxing agencies (state, local, etc.). For some people, this will involve investing in retirement while understanding the effect of future tax rates, while for others, it may be itemizing their current filings. The earlier you establish a well-thought-out course of action with a CPA, the sooner you will see the benefits. Tax planning in general MUST BE DONE proactively – once the tax year has closed (12/31 for most taxpayers) there aren’t very many strategies or actions that can be taken to lower your tax liability. It is crucial to understand your current year’s tax liability PRIOR to the end of the tax year so you can implement these strategies, make estimated tax payments, etc. before 12/31.
What Are The Benefits of Tax Planning?
The benefits of implementing tax planning strategies are hard to overstate. By being aware of your specific tax situation, and acting accordingly, you stabilize your financial health for the long-term. Being proactive in your plan and working with a CPA consistently will prevent you from making costly tax mistakes. For example, if you decide to move forward with a large investment and consult a qualified CPA first, they can help you avoid significant taxation by navigating the complicated tax laws surrounding that investment. It is never too early to start utilizing tax planning strategies.
Types of Tax Planning
What goals you have will affect what type of plan you put into place. A CPA will work with you to customize a plan based on your current situation and the desired outcome you want to reach. Below are some examples of different ways to prepare for your financial future:
- Maximizing your retirement
- Avoiding costly tax mistakes on large investments
- Saving money by itemizing expenses
- Reducing taxes on your estate
- Combining all of the above!
Providing Answers and Clarity | Bennett CPA
Now that you understand the importance of tax planning, it is time to get started! As a Colorado Springs CPA, Bennett CPA LLC wants to help the local community take hold of its finances. We provide both accounting and tax services for people looking to maximize their 2021 tax strategies. If you have tax questions, explore our blog or helpful document page! Looking to get started on your tax strategy? Contact Bennett CPA LLC today for a consultation!