If you’re not sure of the difference between tax planning and tax preparation, you’re not alone.
Tax compliance is simply gathering your W-2s, 1099 statements and handing them to your accountant for tax preparation services. However, this is just tax compliance – making sure you’re in compliance with all federal, state, and local tax laws. It isn’t tax planning.
Tax planning is a more nuanced process and helps you not pay as much in taxes as you would if you were only compliant with taxes.
To adequately take care of tax planning, it needs to happen BEFORE the end of the year, and it includes:
- Planning for retirements
- Making deposits into your kids’ 529 plans
- Managing your stocks to minimize capital gains
Tax planning is a legal and comprehensive service that you should take advantage of to reduce your tax burden as much as possible.
If you’re tired of owing the government, we want to help you discover strategies that can change your situation and maybe even get you a refund. Contact Breithorn Accounting & Business Services today and ask how we can help you with tax planning.