Do you know what the biggest expense of your lifetime is? Perhaps, your house or your kids’ college tuition? The answer is taxes.
It may be strange for you to think about taxes as an expense because most people do not; rather they consider it just a fact of life. Often times when clients begin to think of taxes as being a living expense, they change the way they approach their taxes. Of the Americans who pay taxes, approximately 75% over pay each year, which means it is highly likely that you are in the group of individuals who over pay.
Careful planning can help reduce the taxes you pay over your lifetime, as well as help you as you pursue your financial goals. Tax planning is an important aspect of your financial plan. And like all components of your overall plan, tax planning should not be done in isolation. Instead it should be driven by your financial goals. An effective tax plan will integrate your investments, income, business structures, retirement plan, charitable giving, and estate plan.
By developing and implementing tax strategies, you may help improve your probability of meeting your financial goals. For example, by accurately estimating your annual income tax expense, you may be able to create additional cash flow to help pay down additional liabilities, such as a credit card or mortgage.
The tax code is complex and changes frequently, which is why Russell often coordinates the tax planning process with you and your tax advisor or Certified Public Accountant (CPA).