Tax Strategy: What you need to know. And why you need a pro.

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Taxes are complicated. Doing them right could save you thousands of dollars.

Tax planning is more than just filing your taxes. Rather, it’s understanding the tax implications of all of your financial decisions—and taking steps to minimize your tax liability. That means more money ends up in your pocket instead of the government’s.

There are a few reasons to work with a tax planning professional as part of your wealth management:

Tax laws change frequently.The IRS is NOT trying to make things easy. Which is why most people benefit from working with someone who spends ALL of their working hours thinking about taxes—someone who stays up-to-date on the latest tax laws and implications of those laws.

Tax planning is a year-round process.Most people only start thinking about taxes when it’s time to file. But you should be thinking about your taxes early in the year so that you can make informed financial decisions as the year goes on. Also, there are many tax opportunities that must be utilized during the current calendar year, so waiting until you file might mean you miss these. We’ll always try to keep you ahead of the game here.

Find all available tax deductions and credits.Tax professionals familiar with your financial situation should be able to recommend all available tax deductions and tax credits you qualify for. Deductions are things you spent money on that can be subtracted from your income - so you don’t pay taxes on that amount.

Some of the most common tax deductions include:

  • Mortgage interest
  • Charitable contributions
  • State and local taxes
  • Student loan interest
  • Medical expenses
  • Business expenses
  • Retirement plan contributions

You also might qualify for tax credits - or a straight-up reduction to your tax bill. Tax credits are different from deductions (which reduces your taxable income). Some common tax credits include:

  • Earned Income Tax Credit (EITC)
  • Child Tax Credit
  • American Opportunity Tax Credit
  • Lifetime Learning Credit
  • Child and Dependent Care Credit
  • Retirement Savings Contributions Credit
  • Premium Tax Credit
  • Saver's Credit
  • Foreign Tax Credit
  • Research and Development Credit
  • Energy Efficiency Tax Credits

Beyond finding credits and deductions, when working with a tax planning professional, there are a handful of strategies they might employ to help you pay less at year’s end. These could include:

  • Tax-advantaged retirement savings plans. Retirement savings plans such as 401(k)s and IRAs offer tax advantages you should take advantage of, if possible.
  • Tax-advantaged investments. Some investments, such as municipal bonds, offer tax advantages that can help you reduce your tax liability. That means pay less taxes.
  • Tax-loss harvesting. You might consider selling investments that have lost money in order to offset capital gains on other investments. Overall, we recommend investing for the long term, but there are definitely situations where selling at a lost would be advisable.

It is important to work with a qualified tax professional.

A qualified tax professional can help you develop a tax plan that meets your individual needs and helps you minimize your tax liability.

Regardless of your income level, proactive tax planning is important. The more complicated your investments and income, the more likely it is that tax planning could have a significant impact in your wealth management approach.

Range’s Tax Planning Services

To help you manage your tax situation, Range offers multiple tiers of tax services.

With our Premium package, our advisors will take a look at your previous year’s tax returns and your current financial situation. Has anything changed? Are there opportunities to file differently this year? How are your investments contributing to your tax burden? Based on their findings, they will make recommendations for how you might reduce your taxes when you next file. This is great for people with relatively simple finances.

With our Platinum and Titanium tiers, our advisors can perform slightly more complex evaluations of your tax situation. This includes a thorough historical analysis of past returns, precise withholding projections, forward-looking income and equity event planning, advanced tax scenario modeling, and actionable tax-saving recommendations.


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