Summer has ended. Vacations were enjoyed. The kids are back in school. Time to start our hustle.
Don’t wait until next spring; now is the time to look at your finances and start tax planning.
Often, I hear clients tell me, “I don’t want to pay taxes.”
Realistically, the only way to not pay taxes is to have no income.
No income will not allow you to live your life. You wouldn’t have a nice home, a decent car, kids in private schools, etc.
Your lifestyle choices take not just cash flow, but income left over after expenses. Paying income taxes is unavoidable. Your real concern should be overpaying on your income taxes. With the help of your CPA and Financial Advisor, you can use strategic tax planning to lower your taxable income. A CPA can help you keep records throughout the year and refine your tax liability while a financial advisor can help you prepare for the impact taxes will have on your financial goals.
Below are two other common queries I receive from clients, along with my best response!
“What should I buy to reduce taxes for my business?”
Making unnecessary purchases to lower your taxes will simply push your tax burden down the road. These purchases will reduce your cash flow and send you into a never-ending cycle of buying useless assets and incurring unnecessary expenses. Keep your business lean and efficient by purchasing only the assets you need to sustain your company.
Instead, you can save your business money by implementing proper recordkeeping practices. Keep track of mileage, cash expenses and charitable contributions throughout the year to ensure you get the greatest deductions.
“How do I have income, but not enough money to pay my taxes?”
Preparing for the burden of taxes is a vital component of your financial plan. Something I practice with many clients, and with my own business, is to set aside a calculated percentage of money to pay taxes. A CPA and a Financial Advisor can help you determine how much money you should be setting aside for your taxes based on your profits and expenses.
Every business and individual is unique in their tax strategy. Consult a CPA or a Financial Advisor to properly plan for your taxes and avoid overpaying.
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