We don’t prepare taxes for our clients, but we tend to be the people who help them avoid tax “surprises.” No one wants unpleasant news, so it’s helpful to deconstruct a client’s taxes so we can understand strategic decisions. But there might not be as many ways to save on taxes as people hope…
I recently asked my financial planners what they wish people understood more about taxes. Here’s what they said:
“As the saying goes, don’t let the tax tail wag the dog. Although minimizing taxes is important, it’s just one piece of the puzzle. Tax strategies that prioritize current-year taxes may not be the most beneficial for your long-term financial health, so it’s essential to keep an eye on the bigger picture as well.”
“That there is no magic trick everyone else is using that you don’t know about. Taxes are annoyingly complicated. There isn’t a lot you can do as an individual to change your total tax bill. Unless you’re running a business and have lobbyists working for you, you’re in the same boat as many others – paying what feels like more than your fair share respective to the big names we hear about in the news. Also – if you’re consistently seeing a large tax bill or refund, it’s worth revising the W-4 worksheet to adjust.”
There you have it. Is understanding tax strategies a priority this year? Then I recommend you chat with us sooner rather than later…find out more about what we offer!
