Tax planning is considered to be the process of analyzing your financial situation with regards to your tax liabilities and finding ways to further reduce the taxes that you pay throughout the year. Tax planning is an important factor when you are looking at your complete financial plan. Tax planning helps you to develop a financial strategy to reduce or change your current and future tax liabilities, further helping you to reach your short or long term financial goals. Ultimately, the main goal of tax planning is to look at the current laws which will allow individuals or businesses to further reduce the taxable income for a certain tax period by reducing your income, increasing your deductions and/or taking advantage of tax credits.
The benefits of tax planning for your personal or business financial situation could include reducing your taxes on your income to help you keep more of what you make, reducing your taxes on your estate or gifts so that you can give more to charity or more to your family, further reducing your taxes on your investments and retirement so that you can grow your wealth quicker and that way you can retire in style and if possible defer your income so that your can have the option of keeping your money now and paying less taxes later. Contact a local CPA provider to see how they can help you with your tax planning for your personal or business financial situation.