A Tax Strategy Just Right for You

In our line of work we hear a lot of things like, “This country needs a flat tax or a national sales tax. The IRS is out of control with this complicated tax code – why you’d have to be a rocket scientist to figure it out.”

First of all you have to remind yourself that your government is addicted to tax money. If we had a flat tax it would decrease overall tax revenues, hurt lower income taxpayers and reward high income earners. A national sales tax would put the government at the mercy of consumers, and be a real problem when it comes to long-term budgeting because very large ticket projects like roads or another aircraft carrier take years to complete. We don’t see either of these political footballs scoring a touchdown any time soon.

If you’re like about 40% of Americans who work for a wage and report income from a W-2, single or married, you have no children and rent, then you are already in a quasi flat tax scenario where your tax is very much the same as anybody else in your earnings stratum. A machine can do your taxes.

Our tax codes become more complicated as you accumulate wealth over your lifetime, at least that’s how it is supposed to work. If you do what your parents tell you and manage to avoid most of life’s pitfalls then you should do pretty good. Tax planning plays an important role because it is a part of protecting your assets. Combined with financial, retirement and estate planning, tax planning is the crux that helps to bind the other planning areas into a cohesive lifetime plan for accumulating wealth.

When I was in the Army, and you’re standing in the breakfast chow line and you get to the bacon server, that bacon server would always eyeball you, and poke around in that bacon for a minute and come up with two pieces that were, “Just right for you.” We used to joke about that because we thought that any two pieces are going to be about the same, but that never deterred the bacon server from doing you a favor and finding those two pieces that were, “Just right for you.”

That’s sort of what we do for our clients; we find a tax scenario that is just right for their needs considering their financial plans, retirement plans and estate planning. We don’t just crank out a tax return every year like a machine, we get to know our clients and so long as they give us the opportunity, we like looking out for them, so that we can find that perfect balancing point, that tax plan that is, “Just right for you.”

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