Tax planning isn’t just for businesses. In fact, tax planning for individuals can lower your tax bill, improve your cash flow and help you reach long-term goals. Unlike tax preparation, which looks back at last year, planning looks ahead. Here is how it works and how we can help.
Why tax planning for individuals matters
Good planning looks at your finances through a tax lens. That way, your choices support both your goals and your tax position. With a plan, you can:
- Lower your tax. Use the deductions, credits and exclusions you qualify for.
- Improve cash flow. Time income, purchases and investments wisely.
- Save for retirement. Choose contributions that also reduce taxable income.
Tax laws are complex and change often. So planning works best as an ongoing process, especially around life events such as marriage, a new child or buying a home.
Key parts of a tax plan
Plan all year, not just in December
When you plan early, you have more options. For example, pre-tax contributions to a 401(k) or traditional IRA lower your taxable income. At the same time, they build your retirement savings.
Use every deduction and credit you qualify for
Knowing the rules helps you claim what you’re owed. For instance, mortgage interest, charitable gifts and some medical costs may be deductible if you itemize. With planning, you can meet the requirements and choose the best year to claim them.
Make smart investment decisions
Taxes affect when you should buy or sell investments. For example, holding an asset more than a year usually lowers the tax on your gain. Also, selling losing investments can offset gains. Planning helps you avoid surprises.
Plan for retirement
Retirement accounts offer tax benefits now or later. Moreover, contributing enough to get your employer’s full 401(k) match adds free money to your savings. For more on the basics, see IRS Publication 17.
How FTCG helps with tax planning for individuals
- Year-round support. We help you adjust as your finances change during the year.
- Custom strategies. We tailor each plan to your income, goals and family.
- Teamwork. We work closely with you, and with your other advisors if you like.
Learn more on our tax planning advisory page.
Schedule a tax planning call
Ready to plan ahead? Call (415) 842-2940 or book a free 15-minute call to see how planning could help you.