Why Tax Planning is More Important Than Earning More Money
Most of us talk about how we want to earn more money and how that could lead to a better lifestyle. While there’s nothing wrong with this, you might not have to earn an extra penny to improve your lifestyle, just spend some time tax planning. “Ugh taxes” you say, I hear you, I’m no fan of taxes either but if you’re smart about it you could save hundreds and possibly thousands of dollars every year just by being smart about taxes.
Every country has a different tax system and some citizens of certain countries are better off than others. And just because you pay more tax, isn’t always a bad thing if your government is smart about how they spend your tax dollars, some countries like Denmark while having very high taxes has a sound health care and unemployment insurance system in place. Most countries aren’t so lucky as we know how health care in the US is.
Before I go any further, I should let you know that I’m not a tax professional. While I have spent time studying taxes and financial planning, I am by no means an expert and I want you to take this information with a grain of salt and either do your own research or talk to a tax professional for exact advice, especially if you aren’t in Canada.
Loopholes in the Tax Systems
Unfortunately, there used to be loopholes in tax systems, but most have been plugged now and we have to work with what we have. That means we need to take advantage of all deductions and tax credits available. It also means you might want to start a business and do what you like to do as a side business and deduct expenses to save on taxes. However, you need to be able to have a reasonable expectation for profit.
Why It’s Important to Have an Accountant
A lot of people don’t hire an accountant and file their taxes themselves. Those that have an extremely straightforward tax return probably are saving money, but by having an accountant file your tax return you could be leaving a lot of money on the table, which you could have used for other things. You could potentially have a decent tax refund on anything from education; registered savings plan contributions, or deductions you forgot to claim.
Photo of Time Square by Sprengben on Flickr.
