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800-677-5001
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Tax Management

Tax Advice

While we do not give tax advice, we have a separate tax planning firm which we routinely consult before we recommend a product or an investment strategy to our clients.

The Tax Impact of Your Investments and Planning Strategies

Financial services field is not an island to itself. While a good financial planner can manage your money and help you with strategies that appear to save you big in taxes today, the net effect may not be known until the tax time, or even years later. Here are a few common situations:

  • The results and rewards of a good investment can diminish if they increase your income taxes.
  • If you are saving large amounts in a retirement plan today, what effect it will have on your taxes when you retire?
  • Should you really take advantage of investments in solar, energy resources, low-income housing for tax benefits?

Your Tax Life is History on December 31

On December 31 midnight, all your income and expenses become history. In other words, you cannot change them. Later, at tax time, you give your tax professional your income and expense statements of the past year, including the gains and losses from your investments. It is too late for him to advise you that certain investments you made have negative consequences.

Best Results

Clients achieve the best results when the advisor and clients both have access to tax professionals on an ongoing basis. For this reason, we have established a separate tax planning firm, Tax Centers 360.

For more information CLICK HERE to schedule a FREE CONSULTATION! or just visit Tax Centers 360 to get started!

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1. What is the difference between tax planning and tax preparation?

Tax planning is a proactive strategy used throughout the year to reduce tax liability before the December 31 deadline. Tax preparation is the reactive process of filing historical income and expense reports after the year has ended. Effective tax management requires ongoing planning to ensure investment rewards aren't diminished by unexpected tax increases.

2. Why is December 31 an important deadline for tax management?

December 31 is the "point of no return" for most tax strategies because income and expenses become permanent history at midnight. After this date, a tax professional can only record what happened in the past year; they cannot implement new strategies to change the tax outcome of that year's investments or earnings.

3. How do investments affect my annual income taxes?

Investments affect taxes by creating capital gains, dividends, or interest, which can increase your total taxable income. Without proper tax management, the high returns from a successful investment can be significantly reduced by the resulting tax bill. A coordinated strategy ensures your portfolio growth is weighed against its long-term tax impact.

4. Does saving for retirement always reduce my taxes?

While saving in a traditional retirement plan provides a tax deduction today, it creates a future tax obligation when you withdraw the funds. Effective tax management looks at the "net effect" of these savings to determine how your current contributions will impact your tax bracket and financial flexibility during retirement.

5. Why should a financial advisor work with a tax professional?

A financial advisor and tax professional should work together to ensure that investment recommendations do not have negative tax consequences. Because the financial services field is not an island, consulting with a dedicated firm like Tax Centers 360 allows for a holistic view of how every financial move impacts your tax return.

For more information about our firm and the services we offer, send us a quick email or call the office. We would welcome the opportunity to speak with you.

Support@SignatureAmerica.com |  800-677-5001

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