Tax Planning 101: Tax Planning Strategies

Tfg00124 Apr, 2023Finance

By planning your taxes in advance, you can stagger some of your upcoming tax obligations into a future year, which will give you more cash for investing, running your business, or for personal use. Various ways in which this can be achieved include controlling when certain expenses are incurred or timing when certain income is recognized in the business. The ability to plan for tax differences between years allows you to take advantage of future tax rate differentials. Additional caution may be necessary, however, if tax rates rise the following year. A proper tax planning strategy will also help you avoid or minimize the impact of the alternative minimum tax ("AMT") on your financial situation, as well as preserve the tax benefits you get from many of the deductions you take every year.