NEWSLETTER

The concept of Tax Planning is often an overlooked means of saving hard earned income.  The laws are complex, fear of an audit looms in the distance and tax implications are not top of mind until it is time to file a tax return.

Remember that the Government only requires you to pay the proper amount of income taxes and NOT A DIME MORE.  This concept has held true in many tax court cases where judges have noted it is not wrong to take steps to reduce one's tax obligation within the limits of the tax code.

                                                    COMMON MISTAKES

1.  The biggest mistake made is waiting until too late in the year to asses your tax obligation.  Often it's too late to take action or cash is not available to handle the obligation.

2.  Making a financial decision without conducting alternative tax obligation scenarios.  Buying and selling a home, business, or investment are common examples.                    

3.  Under or over withholding State and Federal income taxes.

4.  Not taking full advantage of tax free and tax deferred programs.  (i.e. retirement and education savings plans)

5.  Not keeping adequate records of deductible expenses.

6.  Not protecting your assets from the final tax bite should you pass away(Estate Planning).

7.  Using non deductible consumer debt(credit cards and auto loans) instead of deductible Home Equity debt instruments.

8.  Failing to take into account changing tax brackets and the AMT amounts.  This is important with the lower tax rates available for certain capital gains and corporate dividends.

9.  Failing to take advantage of tax credits and all allowable deductions.