Tax Planning – Not Just for the Wealthy

Key Takeaways

  • While taxes may be certain in life, there are tax advantage strategies that can help lessen the toll taxes can take on your money.
  • There are three tax advantage benefits to look for when we talk about tax planning: tax deductible, tax deferred, and tax free.
  • Yearly tax planning can save you a lot of money and help build your wealth more quickly over the years.

4 Common Tax Advantaged Strategies

Key Takeaways

  • There are three things to look for in a tax strategy: tax deductible, tax deferred, and tax free. A strategy will most likely not contain all three, but usually will have two of them.
  • Four common tax strategies are 401ks, IRAs, HSAs, and 529 plans.
  • Putting money away using any of these strategies can save you a lot of money over time versus saving money in other ways where they are subject to taxes

Your Future Taxes

Key Takeaways

  • There are two types of tax planners; historians and futurists.
  • Tax historians look to the past to plan for their taxes and can often be left with costly surprises or pay more taxes than they should by not researching changes in the tax code.
  • Being a tax futurist, where you plan your taxes in the first quarter based on changes to the tax code, employer benefits, and personal situation, helps you control the taxes and keep money in your pocket.

Clipping Tax Coupons

Key Takeaways

  • The 1040 form is used to file your tax return and it’s important to know what’s on it so you can take advantage of any areas where you may be able to save money.
  • The main sections of the 1040 form are Income, Adjusted Gross Income, Tax and Credits, and Other Taxes.
  • There are several ways to file your tax return ranging from doing it yourself, to using online programs, community volunteers, or hiring an accountant or tax preparer.