Tax Planning Is About More than IRS Forms

Ideally your tax preparer and your financial planner should work together to help you maximize wealth while minimizing taxes. If you've been struggling along doing your own taxes, you really owe it to yourself to find a tax preparer who is part of a comprehensive financial planning service. Huge numbers of people overpay on their taxes each year, but when you have a skilled and experienced accountant dealing with your IRS tax forms, you can be confident that you're not paying any more than you owe. Furthermore, your accountant can work with your financial planner to help you build wealth while keeping your tax burden down.

Finding Deductions Is Only the Beginning

Deductions on your IRS forms are important, but they're not all that a professional tax planner takes into account when preparing your taxes. In fact, some tax planners will offer to go over your previous year's return to see if it would benefit you to file an amended tax form. Keeping that Adjusted Gross Income figure as low as possible while finding all deductions and tax credits for which you are eligible is a basic blueprint for the tax professional. Your financial planner can then take into account your tax information to help you invest in such a way that your money works hard for you year-round.

Individual Retirement Accounts and Your Taxes

One of the best ways to lower your Adjusted Gross Income on your IRS tax forms is by contributing to an individual retirement account, or IRA. You're allowed to contribute to an IRA regardless of how much you earn, but if your income is below a certain threshold, you may be able to deduct regular IRA contributions on your tax return. Contributions to Roth IRAs are not deductible, but when you withdraw money from your Roth IRA during retirement, you don't pay taxes on it. To contribute to any IRA you have to have earned income, rather than unea
ed income such as dividends or interest income. Your tax professional can advise you how to best take advantage of IRAs.

Your Side Business and the 1099-K

If you have a side business, such as selling items on eBay, and you make more than $20,000 or have more than 200 transactions, you'll be getting a form 1099-K at the end of 2012. Some online sellers are confused about the 1099-K, so if you will be getting one, you may want to consult with an accountant and financial planner to better understand how to make the most of your side business while minimizing taxes.

Start Now to Reduce Next Year's Taxes

Many people only think about their taxes when they see the April 15 deadline looming, but this is short-sighted. When you work with a comprehensive financial planning service, you work all year to minimize taxes while making your money work its hardest for you. You don't have to be a wealthy person to benefit from financial and tax planning. In fact, working with a tax and financial planning service is one of the smartest financial moves you can make.