What exactly is tax planning?
Internal Revenue code section 61 defines gross income broadly as coming “from whatever source derived”. However, the following code section 62 begins to differentiate the sources eligible for exclusion from taxable income. Volumes of tax authority follow behind this basic law defining these two concepts to further define the distinction between taxable and non-taxable and offer more information for the calculation of income tax obligation. Thus the field of tax planning is born!
The best part of tax planning is that it not only provides “free money” that you did not have before but that it is very likely to direct that money into wealth building vehicles that provide permanent benefit for your future.
The primary tools of tax planning are: 1) compensation and benefits planning, 2) tax-advantaged investments and 3) tax-efficient entity and asset titling and transfer. Making these strategies work requires integration with your day-to-day accounting practices. That’s where a relationship with a trusted and experienced professional pays off.
I specialize in helping clients legally avoid income taxes by maximizing income sources not subject to taxation, maximizing credits against their tax obligation and simultaneously seeking to reduce the amount of income that is subject to current taxes. With some effort, it is possible to reduce income taxes substantially, sometimes to almost nothing.
The best way to learn more is to plan a discussion about the tax saving objectives that might be realized in your unique situation and what these results would mean to your overall well-being.