Frequently, people will ask me, "What can I do about my taxes?" The short answer is―it depends. Before getting into any specific tax strategy, it's important to first take the Taxpayers Pledge.
- I will take ownership of my taxes. Sure, much of this can and should be delegated to a professional. Ultimately, however, you will need to be responsible for the planning, payment, and filing of any tax returns.
- I will start my tax planning early in the year. It's true; the early bird really does get the worm. Start on tax planning early in the year and it will be much easier.
- I will maintain adequate tax records. There's nothing like good documentation to support your tax return.
- I will communicate with my tax advisor prior to entering into any significant transactions. The most effective tax planning is done prior to major transactions being completed.
- I will pay my taxes without complaining. OK, you can complain a little, but that's it! Face it―having to pay taxes means, well…you probably made some money. There are MUCH worse problems to have. Keep things in perspective.
- I will review my Taxpayers Pledge quarterly. Treat this as another New Year’s Resolution. Well…you know what you'll get. You likely won't be successful.
Action Item: Before getting into any specific tax planning strategy, take the Taxpayers Pledge. This is sure to make the planning, preparation, and filing of your tax returns go much smoother and turn out more fruitful.