There are two ways to look at taxes: a periodic expense outside your control or an opportunity for creative problem-solving. Most taxpayers choose the first option, but that doesn’t mean you have to take the same path. With the right partners, it is possible to bring your tax bill down. That keeps more of your hard-earned cash in your pocket, where it belongs.
The biggest challenge is that tax law is shockingly complex, even with Tax Reform (TCJA) in place. Identifying opportunities to save, creating comprehensive tax minimization strategies, and executing on those strategies while staying on the right side of the law isn’t for the faint of heart. However, if you are willing to put in the time necessary to develop a workable wealth-building strategy and you take on expert advisors to guide your decisions, you will quickly discover that thinking outside the tax box offers a substantial return on your investment.
Before You Start
When you launch any new venture, you look at the current internal and external environment. You examine opportunities and risks, and you evaluate past successes and failures. You even look to the future and attempt to predict how your internal and external environment might change. This information is included in your business plan to ensure you are fully prepared for any obstacles that come your way.
Creating a comprehensive tax strategy requires this same attention to detail. Before you start, take an honest look at internal and external factors affecting your financial situation. Examine your assets and liabilities, go over your biggest financial successes and failures, and review the current state of the global economy. Stay up-to-date and aware of geopolitical events that might impact the market, so you can develop a plan that delivers tax savings year after year.
Issues to Consider in Your Comprehensive Tax Minimization Plan
A true tax minimization plan doesn’t stop with a single facet of your personal or business finances. It takes a hard look at your entire financial picture, then coordinates all components in a complementary manner. For example, you can create a retirement plan that saves you more by harmonizing your personal accounts with the programs offered through your small business.
Other elements to consider include the following:
- The structure of your business
- Personal and business expense management
- Buying, leasing, and selling real estate
- The amount you pay in capital gains
- The types of investments you choose
- Timing investment purchases and sales
Of course, that’s just the beginning. Everything from your profession to the size of your family can impact your tax bill. With a little planning, you can incorporate all these into a master system of minimizing taxes and maximizing wealth, both in the short-term and the long-term.
Tax Preparation vs. Tax Planning
Traditional tax preparers do one thing well: they complete your returns fully, accurately, and on-time. While these sorts of professionals provide a valuable service, they aren’t the best choice when your goal is to build wealth. Tax preparation is about quantity, not quality, and these professionals aren’t prepared to think outside the tax box. Minimizing taxes to grow your wealth requires the experience and expertise of a Certified Tax Planner.
Learn more about choosing the right team to meet your financial goals in our latest release, Thinking Outside the Tax Box, available on Amazon. Until then, visit our website for detailed information on all things tax-related.
Dominique Molina, CPA MST CTS is the co-founder and President of the American Institute of Certified Tax Coaches. As the driving force and visionary behind the San Diego-based company, Molina set out to change the way tax professionals approach tax planning. In 2009, Molina began to create an elite network of tax professionals including CPAs, EAs, attorneys and financial service providers who are trained to help their clients proactively plan and implement tax strategies that can rescue thousands of dollars in wasted tax. Her more than 12 years of hands-on experience in the accounting and business fields provide her with ample skills to accomplish this mission. Molina has successfully licensed tax professionals as Certified Tax Coaches across the country, creating a national network of highly qualified professionals who provide proactive service for their clients. This premier group of professionals features less than 200 specialists in 40 states who have achieved this very specialized designation.