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So, you decided that tax planning may be beneficial to you. Great! Tax planning is an excellent way to optimize your taxes. However, it is a complex process with moving pieces that keep changing. So, it’s understandable to have questions like “Where do I start?” or “How do I start?”. Here’s an overview of how to get started with tax planning.

How to Start Tax Planning

Plan Ahead

As the name tax planning implies, it is a planning process. So, you can’t wait until tax time to start that process. The earlier you begin the tax planning process, the more time your tax advisor will have to make adjustments and recommendations to optimize your taxes not only this year but for years to come.

Choose the Right Tax Advisor

The last few years have brought significant, complex, and swift tax law changes. With new laws emerging regularly, working with a tax advisor when tax planning is more important than ever. However, just like all tax situations are unique, not all tax advisors are the same. Choosing a qualified tax advisor with experience in tax planning for your individual tax situation is essential.

Provide Your Tax Advisor with ALL the Necessary Information

In order for a tax advisor to create the best possible tax plan and give the best possible advice, they can’t have any blind spots. When you first meet with your tax advisor, make sure to provide them with all the information about your financial situation. This may include tax forms like W-2s or 1099s and information about investment and retirement accounts. However, it should also include information about ALL your income, expenses, financial goals, and any other financial dealings. The more your tax advisor knows about you, the better the plan they create will be and the better advice they give.

Check-In & Review Your Tax Plan Regularly

Although the outcome of tax planning is a tax plan, tax planning is an ongoing process that adapts to changes in your life and tax laws. Make sure that you have regular check-ins with your tax advisor throughout the year. During those check-ins, make sure that you tell them about any changes in your life, like a new job, a new investment, or a new child, so that they can make sure you’re not leaving any tax opportunities on the table and errors aren’t made. In addition, this allows them to let you know about any tax changes that may impact you and advise you of any changes to make.

Don’t Be Afraid to Ask Questions

Your task advisor is there to help you. If something is happening that you don’t understand, then don’t be afraid to ask them questions about it. If your tax advisor isn’t helping, that’s a red flag you shouldn’t ignore.

Getting Started

Although getting started with any new process, especially one as complex as tax planning can be daunting, the initial pain is usually worth it. Just make sure to start as early as possible and be as honest as possible with your tax advisor to get the most out of tax planning.

Have questions about your unique tax situation or getting started with tax planning? Contact us to meet with tax advisors.