ABCast Episode 14 – Tax Planning discusses the basis for and value of tax planning for individuals as well as corporate entities. Many taxpayers greatly undervalue the process of tax planning. Much like a trip to the dentist, tax planning never seems like something to actively anticipate. In this episode Janathan Allen discusses the reasons for and economic benefit of an effective tax plan. The primary goal of tax planning is to structure personal and business transactions in a way which generates specific types of income (a balance of active and passive income) which is further offset by expenses and losses in order to minimize resulting tax liability. Tax planning is always accomplished within the framework of existing federal and state tax codes as well as applicable laws and regulatory compliance.
The fiscal or calendar year-end is an ideal time to accomplish tax planning. In ABCast Episode 14 – Tax Planning Janathan Allen provides an overview of tax planning, when it should occur and how this effective strategy can save our clients a substantial amount of money. The process generally begins with a review of current and previous year(s) tax returns, as well as all present sources of income. Taxation is generally based on the type of income realized by an individual or entity. One of the most effective strategies for influencing tax exposure is to carefully plan and structure active and passive income and associated expenses and when they are realized. The concept of a “fiscal” versus “calendar” year makes it much easier to accelerate or decelerate income or losses in order to minimize associated tax exposures.
In ABCast Episode 14 – Tax Planning Jan discusses the implications of important questions such as:
“How can you best accelerate or decelerate income and associated expenses or losses in order to accomplish the best outcome from a tax perspective?”
“How does underlying accounting throughout the year affect the ease and cost of effective tax planning?”
“What should a US expat know about continuing tax exposures and how an effective tax plan will reduce their tax burden?”
The goal of tax planning is obvious: reduce the tax exposure of the taxpayer or entity. Effective tax planning results in greater retention of the earnings you have worked so hard to generate.
Listen to ABCast Episode 14 – Tax Planning and we hope you enjoy learning more about the important issues associated with reducing tax exposure so that you can keep much more of what you earn. We invite you to meet with Janathan Allen and the experienced team at Allen Barron by contacting Allen Barron, or call 866-631-3470 to schedule a free consultation.