Year-round tax planning can help your financial plan

When it comes to tax management, having a year-round mentality can play a critical role in strengthening and extending a financial plan.

It can also give people the chance to identify areas of improvement in factors such as tax liabilities, deductions and retirement income.

Financial advisor Stewart Willis explained on the Asset Preservation Hour that there are really just two seasons: tax preparation and tax planning. He added that thinking about tax management beyond the April 15 tax deadline can give people a great opportunity to strengthen their finances.

“I always say the best time to do that tax planning is when all that information is still fresh in your mind. This year’s numbers are still sitting right there on the table in front of you. And that window tends to close fast once people mentally check out for the summertime,” Willis said.

Retirees might find unexpected tax consequences arising from Social Security benefits, retirement account withdrawals, pension income and investment earnings. Missing those details could push individuals into higher tax brackets than anticipated. Understanding the effective tax rate is essential because it reflects the actual percentage of income paid in taxes and serves as a useful benchmark when evaluating future tax-saving opportunities.

Tax-planning strategies such as Roth conversions, charitable distributions and income management techniques are generally most effective when implemented before year-end, making proactive planning critical.

Who to turn to for all your tax-planning needs?

Asset Preservation Wealth & Tax will help you with all your financial and tax planning needs. They can personalize your financial and/or retirement to map out taxes, 401(k)s, income, inflation and investments to save you money. 

They can also manage cash flow plans and make sure your spending is on track and up to date with your financial needs.

“The most important thing is to have a true cash flow plan,” Willis said. “And when we do our financial planning with our clients, we use cash flow software that isn’t a static plan. If you have the same financial plan two years ago that you have today, it’s worthless. The world has changed, right? We’re in a different complete environment here.”

Additionally, Asset Preservation helps retirees with estate plans, wills and trusts. They can map out retirement accounts and insurance policies to ensure a stress-free retirement and make sure beneficiaries receive the proper funds and benefits.

Receive a free portfolio review online or call 602-449-0146 for more information.

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