Many people only think about tax planning when they are preparing their tax returns for the prior year. That’s “after the fact” tax planning. By then, it’s often too late to take any actions that will reduce taxes for the prior year.

Tax planning is a year-round process.  Most tax-saving strategies must be implemented well before the end of the tax year, which is typically December 31.  Examples of tax saving strategies include the following:

• Selling losing investments to offset other income
• Saving in tax-deferred accounts vs. taxable accounts
• Not withdrawing funds from retirement accounts before age 59 ½
• Being selective in borrowing money.  Some interest payments are not deductible.
• Timing of property tax payments and charitable contributions
• Delaying or accelerating receipt of taxable income