Did your income tax returns (or tax burden) take you by surprise this year? Perhaps your return was much smaller than you anticipated, or you ended up owing money for the first time in years. This sort of thing happened to many people this year, and it was largely because they were not prepared for the 2018 tax changes.
Whether you were happy or not with your 2018 taxes, now is the ideal time to visit your financial planner and tax expert and revisit your tax strategy. Doing so now, shortly after tax season, can ensure that you’re prepared well ahead of next year’s tax filing and that your financial future holds no surprises. Making a few minor adjustments now can make a world of a difference in just a few months.
Revisiting tax strategies is good practice, no matter your age
Whether you are 25 and just opening your first retirement savings account or 67 and relying on Social Security and retirement savings for income, you need to revisit your tax plan. A lot of changes went into effect for the 2018 tax year, and those can affect you regardless of your age.
Taking a fresh look at your taxes with your financial planner allows you to identify where you might be missing out on tax deductions, whether you need to adjust your tax withholdings and what you can do to shelter your income against tax to keep more money in your pocket for next year.
“Too many people are unaware of the many tax strategies available to them to maximize their income and minimize taxes,” says Samuel Rad, Financial Advisor.
These sorts of things don’t always work well when you try to implement them right before tax season. Take advantage of the remaining months in 2019 with a brand-new tax strategy that works for you, not against you.
And, speaking with your financial advisor about this helps you understand your income taxes in the larger scheme of your overall financial portfolio. There are many ways you can utilize your investments, such as real estate, to your advantage when you file. Taking a look at these things now will ensure your finances are in order by the time you need to file again next year.
Retirees, in particular, should revisit their tax strategies
Although revisiting tax strategies is important for everyone, regardless of their age, it’s especially important for retirees to do, particularly if you recent entered into retirement. Not only did the tax law change in 2018, but your recent transition from one type of income to another may affect how you file your taxes. If you’re not prepared or aware of the many deductions and credits you’re eligible for, you might be paying more to the government than necessary.
Not only is this bad from a financial savings standpoint, but it could be making a difference in how you live your life! Many people live on a tighter budget during retirement because of a fixed income, so wouldn’t it be great to enhance that income a little more by finding ways to pay as little tax as possible?
Of course, this requires not only an in-depth look at your tax paperwork from last year, but also a comprehensive examination of all your accounts and assets, including income sources, investments, tangible assets and much more. For this reason, working with a Certified Financial Planner in Los Angeles is the way to go.