Why Tax Planning Is A Year-Round Process

If there’s anything we can all agree on, it’s that tax season isn’t exactly our favorite time of year. April 15th lives in infamy for all Americans—except for our clients here at Leadingham Rodgers. Why? Because as Certified Public Accountants, we make sure that tax planning is a year-round process.

There are countless reasons why tax planning is a continual process. Regardless of why, the end result of putting off your tax plan is the same: you will miss out on big savings and—worse yet—potentially run into compliance issues. And yet, knowing why you need a qualified CPA to continually plan your taxes can help you understand what you need to be doing throughout the year.

The Crucial Differences Between Tax Planning & Tax Preparation

Understanding why it’s a year-round process begins with understanding the difference between tax planning and tax preparation.

Tax planning involves a mathematical and conceptual knowledge of your finances and, therefore, their tax implications. For example, reviewing your quarterly gross profits, real estate transactions, carry-forward expenses, and depreciation provide you a picture of your current tax liability. Individuals and businesses use this picture to forecast their eventual annual tax burden. Better tax planning allows for better overall planning, whether for your personal finances or for business operations.

Tax preparation, on the other hand, pertains only to the physical organization and submission of tax documents. When engaged in tax preparation, you have already made your tax plan. You—or, preferably, your professional CPA—already know your tax liability, along with the write-offs and deductions that will increase your tax return or overall savings.

Most problems occur when people confuse tax planning with tax preparation. They hear about the importance of being prepared prior to the April 15 filing deadline and think that starting in March gives them plenty of time. The forward-minded CPAs here at Leadingham Rodgers help clients understand, and act upon the knowledge that tax planning requires year-round strategizing to maximize returns.

But What Does Tax Planning Involve?

Consult With A Certified Public Accountant

At a high level, proper tax planning begins with working alongside a Certified Public Accountant. Without professional help, it’s nearly impossible to optimize your tax return, let alone the impact of transactions on your personal or company finances.

The professional CPAs here at Leadingham Rodgers offer the highest quality tax planning service. We work with every industry, sector, and aspect of personal finance to ensure that you take advantage of the tax code to the fullest and most compliant degree.

Staying Organized

At the most basic level, tax planning demands organization. Jumping straight to tax preparation right near the filing deadline forces people to scramble for their documents and information. More often than not, we find that folks will sacrifice their return just to expedite the process.

Working with a CPA helps you avoid this risk. Over the course of the year, we organize all documents and information, constantly incorporating this data into your tax plan. Moreover, we guarantee that your annual filing is 100% accurate so you remain free of compliance or back tax issues.

The Sheer Number Of Filing Requirements

Too many W-2 employees filing through automated tax preparation software believe these programs are optimizing their return. This couldn’t be further from the truth.

As we have mentioned, optimizing your return requires a fair amount of documentation. Also, there are countless items needed to maximize your return. A fraction of these items includes:

• Use of withholding and estimated payments
• Bunched deductions
• 401K contributions
• IRA contributions
• HSA contributions
• Charitable donations
• Tax harvesting of realized capital losses
• Tax exempt bonds
• Real estate tax breaks
• Claiming dependents

And the list goes on. With the sheer number of items required to complete your tax plan, it’s imperative that you are always keeping up. The professional CPAs here at Leadingham Rodgers ensure that your tax planning strategy is taken care of year-round. Don’t trick yourself into thinking that you’re saving money by waiting until March to file through an automated service. Give us a call today, and ensure that you optimize your next tax return.  

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Leadingham Rodgers’ CPAs know sales tax

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