You Know You
Need Tax Planning If…
Effective tax planning helps you make smart
decisions now to get the future outcome you desire - but you need to make sure
you don't miss anything. Forget to account for one of these situations and your
tax plans will go off the rails in a hurry:
- Getting
married or divorced. One plus one does not always equal
two in the tax world. Marriage means a new tax status, new deduction
amounts and income limits, and a potential marriage penalty. The same is
true for divorce, but with added complexity. Untangling assets, alimony,
child support and dependents are all considerations worthy of discussion.
- Growing
your family. While bringing home a new child adds
expenses to your budget, it also comes with some tax breaks. With a
properly executed plan, you can take home the savings now to help offset
some of those new costs. If you are adopting, you get an additional tax
credit to help with the adoption expenses.
- Changing
jobs or getting a raise. Earning more money is
great, but if you're not careful, you might be surprised by the tax hit.
Each additional dollar you earn gets taxed at your highest tax rate, and
might even bump you to the next tax bracket. If you are switching jobs, the
change also includes things like new benefit packages to consider.
- Buying
or selling a house. Whether you're a first-time
homebuyer, you're moving to your next house, or you're selling a house,
there will be tax implications resulting from the move. Knowing how your
taxes will be affected ahead of time will help you make solid financial
decisions and avoid surprises. If you're looking to buy or sell investment
property, even more tax issues come into play.
- Saving
or paying for college. There are so many different college
tax breaks, it can be tricky to determine which ones might make the most
sense for your situation. These include the American Opportunity Tax
Credit, the Lifetime Learning Credit, the Coverdell Education Savings
Account, 529 plans and student loan interest deductibility.
- Planning
for retirement. Everyone needs to plan for retirement,
but each situation is different. Some of the factors to keep in mind
include employment status, current income, available cash, future earnings
and tax rates, retirement age and Social Security. Putting all of these
variables into one analysis will paint a clearer picture of your
retirement strategy and provide a way forward.
Don't make the mistake of omitting key details
from your tax plan. Call now to schedule a tax-planning meeting.
