Tax planning is a way to develop proactive tax strategies to help you reduce current and future tax bills.
Tax preparation is based on prior year's taxable events, with a few exceptions of things you can do after the close of the tax year. Whereas tax planning is looking forward to see ways to structure your money, income, deductions and assets in a way to help you reduce your tax burden now and into the future.
You can use the excess funds towards your goals and wants, instead of the excess taxes weighing down your success.
Tax preparation providers and software rarely provide tax planning services that are forward-looking. At FiduciaOne, we see this as an opportunity to serve and provide this valuable service to help you avoid paying excess taxes.
Your taxable income affects many things, not just how much tax you pay. Your taxable income can cause you to pay more for your insurance premiums, like through the Marketplace or Medicare IRMAA (a tax on your Medicare premiums!!!). We want to avoid the IRMAA excess premium as this extra monthly cost as best we can to preserve your wealth throughout retirement and for your legacy planning). IRMAA means Income Related Monthly Adjustment Amounts.
A high taxable income can also cause you to decrease the amount of tax credits and deductions you are eligible for. A tax plan can help manage your taxable cash flow to help avoid loss of valuable benefits you could be eligible for.
A high tax bill can also deplete your retirement savings by causing you to take out more of your investment money to pay taxes. It can become a vicious cycle that depletes your savings and causes you to run out of money quicker.
Anyone, at any age, can develop a tax strategy. It’s never to early or late to develop a strategy.
It is ideal to develop a strategy as you prepare for retirement. In those years you approach and begin retirement, decisions regarding your income and assets can be made that prepares you and your money for the most tax-efficient income possible.
It is most valuable to develop your tax strategy in conjunction with planning your social security and/or pension income decisions, as being able to manipulate the types of income and ability to control timing of income is an important factor with successful long-term tax and financial planning.
There is no age that is too early to start a tax plan. However, as you begin to prepare for your retirement (ideally 5-15 years prior to retirement), we can develop ways to save your money in a tax-efficient manner, balancing different account types, like Roth and pre-tax IRA accounts.
There are numerous other methods, including health savings accounts HSA, company stock strategies and other income planning methods to create a personalized plan that is unique to your circumstances.
By lowering your tax bill, you have additional money that can be used for your goals, whatever they may be. In addition, we can use your tax savings towards your personal goals and wants or to increase your investments for your future needs and goals.
Financial planners who earn a CFP certification must demonstrate proficiency in risk management, investment, tax, retirement, income and estate planning.
This means that they can work with clients to provide comprehensive services across a broad spectrum of financial planning concerns.
The CFP designation works to compliment the EA designation in that most of the financial transactions one makes in their life has a tax consequence to it. Therefore, Jennifer found it extremely valuable to utilize both designations to serve her clients. Both designations work to create a comprehensive plan that is tax-efficient and able to maximize the money for each client's success.
Verify the status of your Certified Financial Planner here.
An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service. Enrolled agent status is the highest credential the IRS awards.
Like a CPA or tax attorney, an Enrolled Agent (EA) is a designation that shows education, competency testing and experience in areas of taxation. Unlike a CPA, an Enrolled Agent is focused solely on taxation, rather than accounting and bookkeeping services.
At FiduciaOne, our tax experience and services focus solely on the taxation of professionals, professional couples and small businesses owners; like professional consultants, advisors, real estate agents or other small business owners. We focus on tax strategies for these specific clients so we can be best prepared to help you thrive. We let the CPAs provide accounting and tax services to those larger businesses and business owners that benefit and we focus on those left behind that can benefit from the valuable services of tax planning that larger companies and clients receive.
Individuals who obtain the Enrolled Agent status must adhere to ethical standards and complete 72 hours of continuing education courses every three years.
Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
Verify the status of your Enrolled Agent here.
Investment Advisory Services are offered through FiduciaOne, LLC, a registered investment adviser in WI and CA.
Insurance products and services are offered and sold through individually licensed and appointed agents.
FiduciaOne, LLC
N27 W23953 Paul Rd., Suite 105, Pewaukee WI 53072
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