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Tax Planning

2 Reasons Why You Need an Overarching Tax Strategy

By April 23, 2018No Comments

Filing your personal taxes can be a headache, especially if you’re trying to employ new strategies based on life events in the previous year such as buying a new home, starting a business, or having a child. Filing your taxes one way over another can drastically cut into benefits you were expecting, and, in the other direction, sometimes you can be eligible for tax breaks you didn’t even know about. Here are three reasons why talking to tax professionals about your overall tax strategy can save you money for years.

  • You can only take advantage of most deductions only if you forego a standard deduction. The individual standard deduction for 2017 is $6,350, and most people with salaries or waged positions default to the standard deduction. Not only is it an easy lump sum that everyone can deduct without having to prove anything or submit extra forms, it often outstrips the sum of other deductions you can benefit from. However, some deductions, usually related to purchasing a new house or property, can make itemizing worth it. Once you decide to itemize, it’s in your best interests to find every single deduction that applies to you, and that’s where professionals come in.
  • Tax professionals can help you organize your investments. A lot of the more complicated tax codes involve investing: tax loss harvesting can help you save a lot of money if you know how to take advantage of it, and pre-tax investing in a traditional IRA outside of your HR department can get complicated if you forget to subtract it from your earnings. But many tax professionals are familiar with how to organize investments both during economic slumps and profitable years.

Taxes aren’t just something to figure out during the first two weeks in April. If you have an overall tax strategy in mind and work with a professional before and after major purchases, investment changes, and personal events, you can have a much easier time organizing and paying your taxes. Go to Roberts Tax Advisory to get started.