Tax Planning

What Is Tax Planning?

Tax planning is the analysis of a financial situation or plans to ensure that all elements work together to allow you to pay the lowest taxes possible. A plan that minimizes how much you pay in taxes is referred to as tax efficiency. Tax planning should be an essential part of a small business owner or high-net individual financial plan. Reduction of tax liability and maximizing the ability to contribute to retirement plans are crucial for success.

KEY TAKEAWAYS

Understanding Tax Planning

Tax planning covers several considerations. Considerations include timing of income, size, and timing of purchases, and planning for other expenditures. Also, the selection of investments and types of retirement plans must complement the tax filing status and deductions to create the best possible outcome.