Wealth Management & Financial Planning

Wealth Management & Financial Planning

Now is the Time to Engage in Tax Planning

Fall is approaching, bringing with it the beauty of autumn foliage, the anticipation of Thanksgiving and Christmas, and a winding down of another year. During this season of transition, the average family often doesn't give much thought to taxes.

However, if you're reading this, you're not an average person. Now is the ideal time to engage in tax planning for 2023 and even consider 2024 tax planning. Taking a proactive approach to tax planning can allow you to make significant changes while there is still time.

In the near future, we will be sending out our annual Tax Planning Package to the families we serve. This package includes questions about various life events that individuals may have experienced in the previous year, as well as events that may have impacted parents or adult children.

Most people can benefit from conducting deliberate and comprehensive tax planning on an annual basis. The Tax Package we mentioned earlier is designed to pinpoint situations that could affect an individual's tax status.

Events such as marriage, the death of a spouse, or divorce can all influence how income is reported to the IRS. Additionally, specific milestone birthdays, like reaching 59 ½, 70 ½, or 73, trigger changes in the rules governing tax-deferred withdrawals. While taxable income remains the same, new rules and responsibilities come into play.

You might wonder why we inquire about the circumstances of parents or adult children. Our primary aim is to make individuals aware of opportunities to reduce their tax liability. We understand that tax planning is often the last thing on people's minds during significant life events such as layoffs or divorce. Likewise, contemplating income taxes when receiving a terminal diagnosis isn't natural. However, regardless of life's twists and turns, taxes continue to be a part of our financial landscape. Our objective is to help individuals minimize their financial burdens and make the most of challenging situations.

The Tax Package also serves as a reminder for year-end tax planning and helps individuals prepare for the year ahead. What do you foresee in 2024? Perhaps you're considering contributing to a church-building fund, planning a wedding, or thinking about retirement, which will undoubtedly impact your income. These future considerations should prompt financial planning today.

Some people believe in two tax codes: one for the wealthy and one for the less fortunate. However, we disagree; we believe the two tax codes are – one for the informed and one for the uninformed. Regrettably, some individuals recognize they should address their tax situation but never take action.

So, please avoid the mistake of assuming, “My CPA will handle this.” Even the best professionals cannot turn back time. Once midnight strikes on December 31, many of the options you have today will be lost forever. Feel free to reach out to us to request your Tax Package so we can assist you in exploring all your available options.

Financial Enhancement Group is an SEC Registered Investment Advisor. Securities offered through World Equity Group, Inc. Member FINRA/SIPC. Advisory services can be provided by Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

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