Today is tax day, April 15th! Due to the holiday, this year’s filing deadline has been pushed back until Monday which will give many Americans a final weekend to get their returns filed. And, of course, millions of Americans have waited until the last minute and will now hope to see a refund as they complete their returns. Unfortunately, a good percentage of these last-minute filers will end up paying more in income taxes than they should.
If you are fortunate enough to have a good income and an investment portfolio, your taxes are likely to be a bit complex. The U.S tax code is incredibly complicated
and gets changed by Congress and the IRS on a regular basis. While it is frustrating for most taxpayers, it offers excellent opportunities for professionals that know the nuances and can find the legal ways to reduce your tax bill.
“I am proud to be paying taxes in the United States. The only thing is I could be just as proud for half of the money.”
At this point there isn’t much you can do about your 2021 income taxes. But it is a good time to start thinking about 2022. For most upper income Americans, income taxes are their single largest expense and, with some good planning, they can save thousands of dollars, even hundreds of thousands of dollars, in taxes over the years with some proactive tax planning.
Tax planning needs to be done throughout the year, especially toward the end of the year when there’s more certainty around your level of income, capital gains and the latest tax laws. At Vintage, we’ll mock up our client’s tax returns before the year is over in order to look for tax planning opportunities. It may mean a
partial Roth conversion, taking capital gains at a zero tax rate, or determining whether or not to itemize deductions. And, of course, there’s all kinds of other decisions like Roth vs. Traditional IRA/401(k)s, mortgage financing options, and how to maximize the tax benefits of charitable donations.
It’s too late to do much about 2021, but this year you can start planning instead of hoping for the best. You can get a look at multi-year strategies and consider the inevitable changes to the tax laws. At Vintage, our team of fiduciary advisors includes CPAs and CFP®s with decades of tax experience. Contact our office to see how we can help you as you move ahead.