Tax planning involves a thorough audit of your tax liability, analyzing where you might qualify for certain exemptions and deductions that can save you money. Tax law is a very complex field, and many people seek out the aid of professionals tax planning services to get the best deals possible. The overview presented here will explain exactly why planning ahead is so valuable and how you can get started in saving yourself a great deal of money at collection time.

Why Go to a Professional?

Many people do their personal taxes themselves, and many companies have a staff accountant to handle their corporate taxes. In that case, why go to a professional at all instead of just relying upon the resources at hand? Put simply, a business that specializes in tax planning, such as Prasad & Company LLP, knows the nuances of the system better than an untrained individual or even a professional but non-specialized accountant. In some cases, it might be as simple as doing a consultation to help the staff accountant know what to look for in future years. But as tax law changes and businesses grow, having contact with a service who can offer evolving tax planning for your changing needs is often essential.

Is Tax Planning Just Finding Loopholes?

Some people make the mistake of thinking that tax planning is just a fancy word for finding loopholes that save you money. This is not the case. Rather, the process involves a detailed look into all the resources available to make sure that you are filing appropriately for your resources. For example, do you make charitable contributions? If so, that represents a deduction that can potentially generate some revenue or offset high tax rates paid in another area. A loophole is essentially an error that will eventually be fixed by the IRS; proper tax planning instead uses the law as it is intended and makes sure that you are getting the most for your investments.

What Kind of Tax Planning Solutions are Out There?

There are many different degrees of preparation for tax planning, but they often break down into three categories. Purposive planning involves setting out with a specific objective and figuring out how to accomplish that.  Permissive tax planning is a more general approach, seeing what benefits you are entitled to under the law. Short/long range tax planning focuses on the fiscal year, allowing you to first save money in the short term and then to adjust your fiscal plans for future years. When looking into a tax planning solution, consider what you want to accomplish and be ready to tell the planner what you desire from this process.

Tax planning is an effective way to maximize your financial profits. Reaching out to tax planning services gives you an opportunity to streamline your finances, cutting out old ways of doing things that were not profitable and tapping into new resources that you may not have realized existed. This can be a complex endeavor, but reaching out to the right professional can help solve that problem.

Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians, available now on Amazon and at Chapters, Indigo and major bookstores, and as an Audiobook on Amazon, Audible and iTunes.