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What is Tax Planning?

Tax Planning

At Howard Tax Prep LLC, in our Chicago South Loop tax preparation office, we create personalized tax reduction plans that can save from anywhere between $5,000-$20,000 over a 5-7-year period. Traditionally, small business owners, real estate investors, and professional investors (day traders) benefit most from tax planning. 


Howard Tax Prep LLC understands that tax planning is the proactive approach to the reduction of tax liability through the usage of tax law, tax strategies, and large purchase planning. We believe that with proper tax planning, many small business owners can make informed decisions that will drastically reduce their taxes, increase their wealth, and protect their assets.


To reduce your taxes, you need a plan.


You need tax law and implementation methods that leave you with more revenue, without flagging your account for an IRS AUDIT, or going into “gray areas.” 


No matter how good  your tax professional is, April 15th is not the time the start tax planning. 


If you haven’t planned right, by April 15 it’s just too late. Many tax planning strategies are long term solutions that require implementation on a year round monthly basis.


How long does tax planning last?


Tax planning is an ongoing process, as life situations change, tax laws change, and tax credits often come and go. If you're looking to save thousands on your tax bill, tax planning is what you need, rather than taking the reactive approach which means scrambling to find "write off's" and deductions at tax time.  


So what is the difference between tax preparation, and tax planning? 


Tax preparation is REACTIVE, and it is where your tax professional:


Records the history of your financial transactions in accordance with tax laws. A good tax professional will take advantage of all of your tax deductions to lower your taxable income, and utilize every available tax credit to maximize your refund. 


Tax planning is PROACTIVE, and it is where a tax professional looks at your:


· Individual finances

· Financial Obligations

· Family structure

· Business structure

· Investments

· Expected future income

· Pending asset purchases


and devises a customized & strategic plan of attack that allows you to legally reduce your taxable income by changing the character of your income, timing large purchases, and creating situations that eliminate & defer taxation (yes you can actually create a favorable tax situation.) Comprehensive tax planning is the only service that helps you to take advantage of every tax deduction, tax credit, and tax loophole that the law allows. 


At Howard Tax Prep LLC, all of our tax reduction methods are based upon our knowledge of IRS procedures, the proper application of tax law, and the rulings of cases tried in tax court. Our comprehensive tax planning services include an in depth interview, a goal setting session, and a 3 year look back at your business and personal tax returns. Once we’ve identified missed opportunities, we provide a written tax plan that explains the tax reduction methods, applicable tax laws, and information regarding how the tax court has viewed these strategies to legally structure transactions in an effort to pay less tax. 


What do I do with my plan once I receive it?


Once you have your plan, you will then move on to the implementation phase, and receive implantation assistance at a reduced cost. It is not a requirement for you to use our implementation services to execute your plan.   


How much does tax planning cost?


While most firms charge thousands of dollars (which is a reasonable cost considering you'll be saving anywhere from $5,000 to $20,000 per year) our tax planning service cost less than a $1.65 a day, $595. 


Have you organized your business correctly? Is the benefit plan that you have chosen the right plan for you? Is it right for your contractors or employees? Are you using the best mixture of tax deferred and tax free retirement accounts?  Are you utilizing ALL of the legitimate deductions, credits, loopholes, and strategies the tax code offers? 


If you become disabled, do you have a plan to receive TAX FREE income, or will you have you to pay taxes on an already reduced income?