An introduction to the topic of tax planning in 6 easy points:
- Saving taxes doesn’t just happen by accident. It takes deliberate long-term financial planning with a goal, action plan and accountability.
- Everyone has the ability to legally reduce their taxes. The higher your taxes, the greater the potential to save money.
- Tax planning is more effective than other types of financial planning for building wealth. For most of us the most effective way to build wealth is to direct our tax savings into long term tax-efficient investments.
- If most of your income comes from earnings, like salary or self-employment, then most of your tax savings will originate with redesigning compensation and employee benefits.
- If most of your income comes from investments then most of your tax savings come from legal form. ownership and portfolio management.
- The best time to start is now. It doesn’t get any easier to save money in the future and some opportunities to address taxes that have already accrued are lost forever.