Tax Services
It is not difficult to imagine, but your total income tax bill, Federal, State, and Municipal, can easily exceed 50% of your income. To put this into perspective, the government has become your business and life partner, sharing HALF of what you make.
But, the government takes NO risk, has NO shared liability, has to cosign for NOTHING for your company or your mortgage at home, doesn’t even watch the kids if you want to take a day off, and keeps eating even when you can’t afford to. Yes, the government is a FULL profit partner… off the top! When viewed this way, it is no wonder that there is a serious industry devoted to legally reducing or avoiding the payment of income taxes.
Unfortunately, the bulk of this industry has it backwards. Everyone gets excited AFTER January 1st. By then, it is too late. Whatever has happened the year before, has happened. You can do very little, unless you want to get very creative and very risky, to change what has taken place. In our tax work, the busiest months are October, November, and December.
Why?
Because those are the last three months, if you are a calendar year taxpayer, in which you can actually CHANGE what is about to happen at the end of the year. You ARE in control of your tax situation, your payments, and your future. It’s called Tax Planning. As in planning for what is about to happen. As opposed to an Accountant, who accounts for what has already happened, after it is over.
This concept is deceptively simple. Would you do something to reduce your taxes if you knew, with 45 or 30 or even 15 days left in the year, that you had a substantial year end tax bill? Of course you would! You would scramble to find deductions, because each one would be worth half its weight in gold. Every dollar spent wisely would come with an automatic fifty cent rebate.
Tax Planning starts, in January, but for the NEXT year, not the PRIOR year. Plans are created, estimates are made, and circumstances are evaluated for their ‘tax potential’. Throughout the year, brief meetings or email exchanges are held to update the present situation versus the estimated situation. If circumstances change rapidly, or even steadily, from the original plan, new plans are reviewed and devised to absorb additional incomes, and/or reduced deductions.
By the time you approach Thanksgiving, the Plan is either on track, or requires further adjustment. Either way, you go into the end of the year in control, knowing where you stand, and confident of not only not having any surprises, but in the knowledge that everything that could be done in your situation, has been.
This 12 month a year service is one foundation block of the Comprehensive Plan services, and is included in the cost of that service. For those interested, it is available as a stand alone service.It is never too late to begin saving on your taxes.