It’s officially tax season.

I know, I know. No one likes to talk about taxes. They’re boring. They’re high, seemingly always increasing. And they’re everywhere. They’re at the gas station, the grocery store, buried in your investments, and even coming out of your paycheck. But the thing is, taxes impact just about every aspect of your life, so maybe…just maybe, it’s worth spending some time planning for them.

Thorough tax planning can impact your entire financial situation. When looking towards that April deadline, here are a few things to consider.

First, it’s important that your financial advisor works with your CPA or tax preparer. Your financial advisor should have a full picture of your entire financial situation and therefore be able to consult with your CPA as needed to minimize tax liabilities and strategize regarding distribution planning and be aware of any updates in tax credits available to you. A few minor changes can have a positive long-term impact on your overall financial picture.

Second, tax planning saves you money. Investment portfolios and your overall financial plan should be tax efficient. Things like Qualified Charitable Distributions, Roth conversions, tax loss harvesting, and adjustments in your distribution plan can potentially reduce your tax liability. More money in your pocket increases the amount you have to save, give, spend, and invest.

Third, tax planning should be comprehensive and year-round, not a singular conversation that occurs each spring. For example, your advisor should be ensuring your withholdings are sufficient when you take distributions, and that you have a clear picture of what you would owe in taxes if a particular investment were sold. Also, when comprehensive tax planning is not considered, ticking tax time bombs can be created. For example, if you don’t plan for required minimum distributions, you may be required to take out more than you thought, which would increase your taxable income, causing your tax bracket to be higher in your retirement years, increasing your overall tax bill.

Ultimately, it’s worth taking the time to have a solid financial plan so there are no unwanted surprises come tax time. Ask the questions, and not just every year in April, but all along the way with your fiduciary advisor. If you want to know more about what a comprehensive financial plan includes, simply head over to our Contact Us page and schedule a conversation with us today. After all, the time spent planning is well worth the payoff it brings.

The commentary on this blog reflects the personal opinions, viewpoints and analyses of the author, {Jay Hagy} providing such comments, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser or performance returns of any FIA client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment, legal or tax advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. FIA manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Any statistical data or information obtained from or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. Investments in securities involve the risk of loss. Any Past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where FIA and its advisors are properly licensed or exempted. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD # 175083.