Tax Planning

Tax Planning: Laying the Groundwork for Tax Season

Smart moves at the beginning of tax season can help get your financial house in order.

Contrary to popular belief, tax planning isn’t limited to the months between year-end and April 15. In fact, smart tax planning goes beyond deductions and credits and should be incorporated throughout the year. As Americans prepare to file their returns, let’s take a look at what we should be thinking about for tax season and beyond.

Get It Together, Now

The beginning of each new year is the time to get organized before filing your taxes. Make an appointment with your accountant and prepare by gathering all the relevant documentation. 

Among other things, you’ll need:

  • Year-end statements from financial accounts
  • W-2s, 1098s and 1099s, K-1s (many can be found online)
  • Last year’s tax returns
  • Receipts for donations and business-related expenses
  • Social Security numbers for your spouse and dependents
  • Business identification number
  • Tax ID number for daycares or schools, if filing for the child care credit

Although most 1099s are mailed by the end of January, there is generally no deadline for issuing them, and some may be delayed or later revised. Your account can help you decide if you need to file an extension due to a delayed or revised 1099.

Tax Planning Strategies for Any Season

If lowering your taxes is a priority, start a conversation with your financial and tax advisors about ways to save money come filing time. Consider these perennial options:

  • Put pre-tax dollars to work. Flexible savings accounts – available during your employer’s open enrollment period – allow you to use pretax dollars to pay for qualified expenses. You can also use pre-tax retirement contributions to reduce your taxable income.
  • Fill in the blanks. Work with your financial advisor to make sure all the cost-basis information is complete and accurate before calculating losses and gains for tax-loss harvesting purposes.
  • Pursue tax-efficient investing. Investing should be focused on meeting your goals, not just on reducing taxes. But in some cases the two dovetail nicely. For example, interest* from municipal bonds is generally exempt from federal and state income tax (if you’re a resident of the state the bond is issued). You could also sell underperforming stocks to offset realized gains.

For all taxpayers, it’s essential to take a look at what tax strategies could benefit your specific situation without losing sight of your overall financial goals. Reviewing your investments in light of your goals, the tax environment, and the economic landscape can help you see where adjustments need to be made to position yourself for a stress-free upcoming year and beyond.

We hope you find these details helpful. Please contact your local Signature branch if you have any questions or concerns about the upcoming tax season – we’re happy and ready to help!

*Interest may be subject to the federal alternative minimum tax and state or local taxes.
Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

About Signature Wealth

Signature Wealth Strategies is a wealth management practice serving families like yours with a hands-on, concierge level service. Our advisors help you confidently plan your financial future through comprehensive strategies and custom solutions. We believe that each client’s story is as unique as his or her signature, and their financial strategy should be too.