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How the Benefits of Tax Planning Outweigh Simple Tax Filing.
Roberts Wealth
July 6, 2022


It goes without saying that taxes have a long history of being quite perplexing. Whether it’s preparing your own personal taxes or trying to translate the tax code and how it impacts your retirement savings, taxes aren’t the most easy-to-understand part of most people’s lives.

It’s essential for us to realize what this tax confusion ends up creating: the norm is to do the bare minimum. This isn’t because people are lazy, but because to do anything but the most basic of tax preparation requires an increasing amount of expertise. And this overall lack of expertise means that most people aren’t getting everything out of their individual or business taxes that they could be.

There are many ways this is true, but maybe none so far-reaching as the difference between tax planning and tax filing. For those looking to dive a little below the tax surface, this is a good place to start, so we drew up a short guide that we hope helps.


First, some simple definitions:

• Tax filing is the process of completing a tax return and sending it into the IRS, with the intention of paying only the taxes you owe with all the deductions possible.

• Tax planning is when you partner with professionals to plan out your investments, income, spending, and business structure to get ahead of all of those opportunities for tax reductions in advance.

In short, while just about anyone can do tax filing (or at least TurboTax would have you believe), tax planning taxes a bit more knowledge. While the tax code is not nearly as daunting as it is purported to be, there are still 4,000 pages of code, and as anyone will tell you – 4,000 of anything is a lot.

There’s also the matter of tax process to be considered. Most Americans don’t need to be familiar with the tax code in order to file their taxes. Moreover, they can literally wait until the last few hours of the deadline to do so, and many do.

But this lack of planning means that most people aren’t getting the most out of their returns because they haven’t been doing the tax planning all year. They merely know how to file – they haven’t been preparing and planning the other 364 days of the year.

This is especially true if you own a business or have retirement savings of any kind (doubly if you have both!). Tax filing gives the individual or the business owner the myriad of ways get deductions now. That means, when it comes time to file, all that planning that was implemented throughout the year could save money, time, and create larger returns. Missing from this once-a-year formula are all the tax decisions that have effects far down the road. Decisions like:
– What retirement accounts to fund and when
– How to blend retirement account distributions and social security payments
– What deductions to take now and what ones to defer when your income tax rate status may be different, for better or
for worse.

Instead of shoehorning in what we think is the right move, tax planning allows us to set up how you run your household or business, planning for effects today and long into the future, meaning you don’t miss out on ways to save.

“There’s also the matter of process to be considered. “


The tax landscape can be a tricky one to navigate; there’s no way around it. But with the right planning, you can actually have enormous control over your effective taxes in retirement. Of course, it’s always better when you have the right expertise to help you along the way.

The truth is, we’re biased at Roberts – we think you deserve the very best in all things. And because that’s central to how we do what we do, we recommend using a financial and tax professional to help you get the most out of your tax planning and your tax filing. The best help for the best outcome? That’s the best of both worlds. In addition to partnering with great tax specialists, our planning clients get annual reviews of their tax strategies where we seek to optimize investment and retirement income decisions for now and in the future.


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