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Why is Tax Planning Important? [Video]

Find out why tax planning is vital to your financial health.

Video Transcript:

Rochelle Chandler: What comes to mind when you hear the term “tax planning”? Does it mean saving your receipts and keeping track of your expenses and income, or is it much more than that?

The answer is yes. It is much more than just keeping track of your income and expenses. Tax planning is actually the practice of effectively using available strategies to either avoid or postpone taxes. It is the art of keeping as much of your hard-earned money as possible.

I want to share a quote with you from the IRS manual. “Avoidance of tax is not a criminal offense. Taxpayers have the right to reduce, avoid, or minimize their taxes by legitimate means.” (IRS Manual Sec 25.1.1.2.4). However, the IRS is not going to tell you how to do that. That’s where we come in.

Tax preparation is looking at taxes in the rear-view mirror, whereas tax planning is looking ahead. It is done looking forward over several years, therefore it can be done at any point in the year. Tax planning is really invaluable because tax laws change every year, and the new laws and regulations are complicated with each turn of the calendar.

The importance of tax planning has never been greater. At the same time, the benefits of tax planning are also more valuable than ever before. Although many people know the importance of both tax planning and financial planning, they fail to make the connection between the two. When a person sets out to plan for their financial future, there are many things to consider. One factor that may be overlooked is that taxes are the greatest expense they will have in their lifetime. That’s why it is critical to consider tax planning as part of your financial planning.

By knowing and understanding the tax laws and regulations, you can avoid some huge mistakes that could cost you significant amounts of money. There are many mistakes that people make when it comes to taxes and financial planning that could easily be avoided. One of the best ways to prevent these kinds of mistakes is to get help from a professional.

Chad Chandler: Thanks, Rochelle. At Chandler & Knowles, we are tax planning professionals with a wealth of experience in tax planning. Contact us and allow us to make your life less taxing.

Contact a Tax Professional Today

To learn more about the tax planning services at Chandler & Knowles CPAs, contact us today at (817) 369-3874 or fill out our contact form to schedule your appointment at one of our offices in Flower Mound or Addison, TX. Not from the area? We are still happy to assist you over the phone or through email.

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