Tax Planning isn’t Tax Preparation

Tax planning should ideally be done throughout the calendar year, not just at year-end. Here are some key reasons why:

1. Proactive approach: Ongoing tax planning allows you to take a proactive rather than reactive approach to managing your tax situation. You can make strategic decisions throughout the year rather than scrambling at the last minute.
2. Better timing of income and deductions: By planning ahead, you can more effectively time when you receive income or incur deductible expenses to optimize your tax position. This may involve accelerating or deferring income/deductions between tax years.
3. Tax-loss harvesting: With year-round planning, you can strategically realize investment losses to offset gains throughout the year.
4. Charitable giving strategies: Planning ahead allows you to implement more sophisticated charitable giving strategies like donor-advised funds.
5. Life changes: Major life events like marriage, having a child, or changing jobs can significantly impact your tax situation.
6. Legislative changes: Tax laws can change during the year. Continuous planning allows you to adapt to new rules or take advantage of new opportunities.

Maintaining an ongoing tax planning approach throughout the year may lead to better tax outcomes and fewer surprises when it's time to file.

Tax-loss harvesting involves certain risks, including, among others, the risk that the new investment could have higher costs than the original investment. There may also be unintended tax implications. Prospective investors should consult with their tax or legal advisor prior to engaging in any tax-loss harvesting strategy. There can be no assurance that any strategy will achieve its objective. This material should not be interpreted as tax advice. We do not give tax advice. Please consult with your qualified tax professional for tax advice.

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