It’s easy to push tax planning to the sidelines when tax laws are ever-changing and hard to understand. Here are four common reasons people use for avoiding tax planning, and tips to get past them:
This point of view is especially problematic in years with unique situations.
– Selling a house? You can avoid taxes if primary residence requirements are met.
– Starting a business? Choosing the correct entity can minimize your tax rate and the type of deductions you can take.
– Getting ready to retire? Properly balancing different revenue streams such as part-time wages, Social Security benefits and IRA distributions will have an impact on your tax liability.
Timing is important when it comes to minimizing taxes, and timing is something you can control. Bundling multiple years of donations into one, holding investments longer to get a lower tax rate,
and making efficient retirement withdrawals are prudent tax strategies that you can control.
When the standard deduction doubled in 2018, many assumed they could kick their feet up and wait for a big refund. That assumption proved to be false for a large number of taxpayers. Every year has its own set of changes that you should plan for well before tax time rolls around. Necessary changes to withholding are less drastic when spread over more pay periods.
Tax planning is often as simple as looking for ways to reduce taxable income, delay a tax bill, increase tax deductions, and take advantage of all available tax credits.
The best way to start is to pick up the phone and ask Alloy Silverstein for assistance. It’s not too late to get on track for 2019. If you haven’t scheduled a tax planning meeting, now is a great time to do so.
This article was published in Alloy Silverstein’s Fall 2019 Newsletter. Click here for more content or to subscribe.
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