A Road Map To A Successful Tax Strategy
When it comes time to plan a successful tax strategy, there are three main stages. In order for true success, none of the stages can, or should, be skipped. Remember, a well-mapped out tax plan will allow you to become an efficient and educated tax-payer.
To begin, the tax strategy itself is the first step. During this time, you and your advisors should step back and observe your current situation as well as your goals and objectives. With these in mind, you can work together to plan out a strategy that will take you from start to end. As a tax advisor, I've found that it's most helpful to have both immediate and longer range steps, with a time span up to 5 years for some clients.
The first step is the biggest as it's the time when clients and advisors really get a clear picture of the present and the future. Clients sometimes find that they are overpaying because of a faulty existing plan which often only gets worse unless the faults are pinpointed and fixed immediately. Compare it to a small crack in a windshield. The longer you wait the longer and more severe the crack becomes and the more expensive it is to repair. This is why it's so important to plan and implement a proper tax strategy, especially as new tax laws are passed yearly. Don't let a faulty tax plan put you in a deep hole.
The second part of the process involves implementing any changes that need to be made. Changes should be made in a timely fashion so that the strategy can remain completely successful. If your business structure needs to be changed, don't wait months to do so, or else you'll find that step one was nothing but a waste.
Lastly, you and your advisor will have to prepare a tax return that fully reflects your new strategy. This may mean claiming deductions that you may have failed to claim in the past. Your new tax return should be flawless and should result in you paying less and possibly getting a larger tax return.
In the end, all three steps are necessities in ensuring that your next tax return is successful. Strategizing, development, implementation, and then on-paper tax compliance are all needed so that you can save tax money and properly protect your assets.
To begin, the tax strategy itself is the first step. During this time, you and your advisors should step back and observe your current situation as well as your goals and objectives. With these in mind, you can work together to plan out a strategy that will take you from start to end. As a tax advisor, I've found that it's most helpful to have both immediate and longer range steps, with a time span up to 5 years for some clients.
The first step is the biggest as it's the time when clients and advisors really get a clear picture of the present and the future. Clients sometimes find that they are overpaying because of a faulty existing plan which often only gets worse unless the faults are pinpointed and fixed immediately. Compare it to a small crack in a windshield. The longer you wait the longer and more severe the crack becomes and the more expensive it is to repair. This is why it's so important to plan and implement a proper tax strategy, especially as new tax laws are passed yearly. Don't let a faulty tax plan put you in a deep hole.
The second part of the process involves implementing any changes that need to be made. Changes should be made in a timely fashion so that the strategy can remain completely successful. If your business structure needs to be changed, don't wait months to do so, or else you'll find that step one was nothing but a waste.
Lastly, you and your advisor will have to prepare a tax return that fully reflects your new strategy. This may mean claiming deductions that you may have failed to claim in the past. Your new tax return should be flawless and should result in you paying less and possibly getting a larger tax return.
In the end, all three steps are necessities in ensuring that your next tax return is successful. Strategizing, development, implementation, and then on-paper tax compliance are all needed so that you can save tax money and properly protect your assets.
