I decided to upgrade my wardrobe after hearing someone say that what you wear portrays your professional image.
Not that I needed an excuse to shop for clothes, I set out to find the best deals in high-end business attire. It took me a long time to peruse different clothing sites to find the best deals. Nordstrom had its annual Anniversary Sale, Tory Burch was having a sale, and Ted Baker had some great finds. I think I spent weeks just comparing and searching to find outfits I truly liked that wouldn’t break the bank.
Ironically, when I talk to my friends, they do the exact same thing. Why else would Nordstrom Rack be so popular?
Yet, when it comes to tax planning and tax strategies, taxpayers spend little to no time doing this. Tax planning on a quarterly basis can save taxpayers thousands or even tens of thousands in tax savings.
However, we will spend weeks trying to save a few hundred dollars on our clothes. Why is that?
“I believe the main reason people don’t tax plan or strategize is that they don’t know where to begin.”
The tax code is daunting!
Even more so now that we have a new president in office and know there will be changes to the tax code again.
So, where do you begin?
Here are some common strategies I’ve seen missed in my practice:
– Choosing the right structure for your business.
– Hiring your children.
– Charitable Planning.
– Accountable Plans.
– Retirement Planning.
I remember a general contractor who came into my office. He was paying an average of $40K a year in taxes. We devised a plan for him, using some of the items listed above along with other strategies, and the first year after implementing those strategies, he saved over $30K in taxes and ongoing. In the last 3 years that I have been preparing his returns, his savings are over $90K.
Tax planning and strategies are unique.
No one plan fits all.
Make sure to consult with a tax professional who specializes in tax planning and strategies. The time spent consulting and implementing the plan will be the most cost-beneficial time ever spent!