Why Tax Planning Matters
Lifestyle Financial Planning, Retirement Planning, Protection Planning and Tax Planning, they are all intertwined resulting in a plan that will assist you in achieving your desired future. Tax Planning will help you to forecast your tax liabilities and can provide you with options – permissible allowances, deductions, exemptions, exclusions, deferral, etc. – to minimize the amount of taxes you have to pay. By utilizing effective tax planning strategies, you will have the possibility to postpone or avoid taxes, and therefore have more money to spend, to save or to invest.
An investment portfolio for example can help you offsetting tax liabilities and is probably the most preferable way to help reduce taxes. Assets in a traditional Individual Retirement Account (IRA) can grow tax-free while the assets remain in the account. Various life insurance options can be used for their tax-deferral features and also estate planning is a form of tax planning.
In short, you have many tax planning options at your disposal. Tax planning strategies can have an enormous impact on your lifestyle – your standard of living – both now and in the future. For American expats and U.S. connected persons tax planning will be even more crucial with the introduction of the 2010 Foreign Account Tax Compliance Act. Talk to an independent financial advisor to get information concerning your own specific tax situation.
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