Dealing with tax intelligently.
A prudent approach to financial planning requires that any plan should be carefully analysed from the perspective of taxation.
The aim is to accomplish all the goals of a financial plan in the most tax-efficient manner possible. That generally means minimising the tax liability, in strict accordance with the law.
Good tax planning may include the timing of income and of asset purchases, selection of investments and types of retirement plans, as well as filing status and a full understanding of the deductions which are possible.
While tax planning is an important element in any financial plan, it shouldn’t be allowed to become ‘the tail that wags the dog’. We would never recommend a course of action purely for tax planning motives which can ultimately be counterproductive.