There are a ton of things that your tax advisor might not be telling you in terms of your wealth management and financial well-being. We are going to discuss some of the possible myths that your tax advisor might not be telling you the entire truth about.
Tax Planning Myths
#1 – Tax Planning and Tax Preparation Are the Same Things
A lot of tax preparers are really good at filling out a tax form. In fact, they are usually the type of personality that is analytical, conservative, and perfectionistic. These are all great things for getting an accurate form filled out and turned in on time. Unfortunately, for thinking outside the box this might not be the best for creative tax planning that can save you thousands!
On the other hand, a great tax planner understands the whole picture and is always thinking outside the box to come up with solutions that reduce your tax burden legally. Tax planners should be advising you not just on your return but on strategies for everything you, your business, or your investments do.
#2 – Tax Loopholes Are Unethical
There are those that frown upon tax planning or tax loopholes. And claim somehow that by reducing your taxes you are being unethical, selfish, or are not patriotic.
A great tax planner knows the laws passed by Congress and simply follows the law to find opportunities for you to reduce your tax burden. In fact, you could say they are even more patriotic because they know the tax laws better than anyone and are concerned with the people, laws, and government actions on a level far beyond the average citizen.
The fact is that tax planning when done correctly is both ethical and legal. A great tax planner wants to find the best possible balance between paying what is legally owed and eliminating waste so that you can more effectively serve your family, employees, and charities all within the law.
#3 – Tax Planning Only Happens on April 15th
If your tax planner is only thinking about taxes on April 15th you are completely missing the tax game! Tax planning should happen year-round. A great tax planner knows that in order to win the tax game you have to be constantly preparing and planning your strategy.
#4 – Refunds Are the Best!
If your tax planner’s only strategy is to wait for your tax refund after filing then this is a clear sign that you might need a new tax planner! Tax planning should help you eliminate overpaying. If you are constantly overpaying your taxes and getting a refund then essentially are loaning your hard-earned income interest-free to the government. You should be putting that money to work earning interest on your money.
#5 – Asset Protection & Tax Planning are the Same
Some Tax Planners claim that by using legal entities such as an LLC or Corporation that you are protected from lawsuits and there is nothing else to worry about. A well-rounded tax planner understands that there are ways to both protect AND reduce taxes at the same time. By looking at both the tax, legal, and estate planning sides a great planner can effectively reduce taxes and protect your hard-earned assets.
All tax, legal and other financial planners are not created equal. There is not a one-size-fits-all approach when it comes to effectively managing your estate. Legal structures, tax, and estate planning techniques are the optimal way to make sure you are effectively meeting every possible need no matter your estate size. Here at Protect Wealth Academy we have been teaching all of these techniques for decades and bring in the top experts to help you understand and implement these strategies. Sign up for a FREE workshop or training today!