What’s So Special About Tax Planning?

Mar 8, 2023 | Tax Planning

Transcript

Hi, I’m Kyle Barclay, Senior Vice President and Wealth Advisor at GreenUp Wealth Management.

It’s that time of the year when just about everyone in America is busy doing what just about everybody in America hates to do: preparing and filing tax returns. What’s the difference between filing your taxes and tax planning?

Tax preparing is similar to when I’m driving my car and I look out my rear-view mirror and see where I’ve been.

That’s just like filing your taxes or tax reporting- it’s a historical record of your earnings and your expenses in the past year. It’s where you’ve been financially.

Now tax planning is when I am looking out my windshield as I drive my car. I’m focused on where I’m headed, making decisions about turning, accelerating, and braking as I drive to my destination, all while looking out for road hazards along the way.

Tax planning is just like looking out the windshield- it’s the process of managing your finances in a way that gets you to where you want to be: minimizing your tax liability. Tax planning involves making strategic decisions on how to structure your income, your investments, and expenses while looking out for tax hazards that may cost you money.

While tax filing must be submitted by mid-April each tax year, tax planning can be done throughout the year.

Here are just a few tax planning strategies, far from all, that might help reduce your tax liability.

Maximize your tax deductions with items like

  • Charitable donations
  • Business expenses

Contribute to a qualified retirement account such as a

  • 401(k)
  • 403(b)
  • or IRA

Invest in tax-advantaged accounts such as

  • Roth IRAs
  • Health Savings Accounts (HSA)
  • 529 College Savings Accounts
  • Cash value insurance policies

Plan the timing as to when to take capital gains and losses with your investments.

Consider tax-free investments like municipal bonds.

As you are all well aware, U.S. tax law is complex. In fact, in 2012 The National Taxpayer Advocate did a word count of all the tax statutes and IRS regulations, and came up with roughly four million words!

In addition to the myriad of laws, credits, and deductions, your financial situation is unique. Your tax professional and your wealth advisor can work with you to identify opportunities to reduce your taxes so you can keep more money in your pocket. At GreenUp Wealth Management, we’re committed to tax planning tailored specifically for you to potentially save you money in taxes each and every year.

I’m Kyle Barclay. Thanks for stopping by!

Author

  • Kyle Barclay, CFP®

    Senior Vice President | Wealth Advisor | Kansas City -- Kyle is a CFP® and has been in the financial services industry advocating for clients helping them reach their financial goals for over a decade. Prior to joining GreenUp Wealth Management in April of 2021, Kyle served clients as a financial advisor at a broker dealer and a registered investment advisor for 10 years. Before working in financial services, Kyle spent 8 years working in management for independent grocery stores across Missouri and Kansas always keeping a customer first mentality. As a leader in the grocery industry, he focused on enhancing each store’s customer experiences by tailoring each store’s product options, implementing new customer services, and training employees how to better understand how to best serve their customer in their respective departments.

    https://greenupwealth.com/meet-your-team/kyle-barclay/ kyle.barclay@greenupwealth.com Barclay Kyle

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