Your browser does not support JavaScript

Our Promise To You

We provide a comprehensive view of your financial life and all the factors that go into life planning. What this means to you is help with personal decision making and putting a date on things. We help you manage your finances and investments, while taking into consideration tax planning, professional moves, children, retirement, healthcare and other important priorities. It’s about life planning and gaining more comfort with your long-term financial security.
 

Blog & News

Tax Preparation is not Tax Planning
Posted By:  Rob Lemmons CFP®, CPA, AIF®, CEPA
Thursday, October 19, 2017

blogMore times than not after reviewing a new client’s tax returns, it is pretty evident of the lack of tax savings strategies.  Tax planning is not done in April when tax returns are filed.  Tax planning is a process that is done throughout each year.


Here is the latest example:  Client who is retired and working part time had adjusted gross income (AGI) of $7,000 after deductible IRA contributions of $5,500 for each taxpayer and spouse.  After itemized deductions of $40,000 and exemptions of $15,600 their taxable income was negative ($48,000).  This is an example of what we refer to as “wasted” deductions. 


This is one of the worst examples of no tax planning and how it cost the client real money. Here’s why: in this particular year, the taxpayer would have qualified for a Roth IRA contribution.  Roth IRA’s are not deductible but all future growth in the Roth IRA can be withdrawn tax free in retirement.  Even by making the Roth IRA contributions instead of deductible IRA contributions, the taxpayer still would have had income of ($38,000), thus no tax impact!    


There are number of other tax planning strategies that could have taken place in the year to use up the “wasted” deductions, but go beyond this short blog.


Assume the $10,000 of IRA contributions grows at 8% for 20 years.  Both the regular IRA and the Roth IRA could grow to approximately $46,000.  However, the withdrawals from the Roth IRA are completely tax free, while the withdrawals from the regular IRA are taxable at ordinary income tax rates.  At a 25% tax rate that is $11,500 of taxes that would be unnecessarily paid because of the tax preparer not taking the time to review the tax return and think through the recommendation.


Financial planning and investment management requires the guidance of a trusted and experienced advisor, such as a fee-only Certified Financial Planner™ (CFP®).


Click here to learn more about how these tax planning strategies can save you money, or contact Rob Lemmons, CFP®, CPA, AIF, CEPA at 513-984-6696 or via email.





 
 
Subscribe To Our Blog

Blog Categories

  • In the News
  • Business Owners
  • Charitable Planning
  • Client Experience
  • College Planning
  • Estate Planning
  • Executive Compensation
  • Firm Updates
  • Investments & Market Updates
  • Retirement Planning
  • Security & Privacy
  • Taxes
    • 10/27/2020 - 2020 Year End Tax Planning Str
    • 04/28/2020 - High Income Professionals Can
    • 03/26/2020 - Coronavirus Stimulus Package -
    • 01/24/2020 - 2020 Major Tax Law Changes
    • 12/23/2019 - 2019 Year End Tax Planning Str
    • 10/16/2019 - Ohio Homestead Exemption
    • 05/30/2019 - Increasing Taxable Income as a
    • 04/18/2019 - Why You Should Provide Your Ta
    • 02/12/2019 - Reducing Your Real Estate Taxe
    • 12/04/2018 - Payments to the IRS through "D
    • 08/01/2018 - Value of Roth Conversions
    • 06/18/2018 - Charitable Gifts from your IRA
    • 04/27/2018 - The Tax Saving Power of a Heal
    • 12/21/2017 - Tax Cuts and Jobs Act of 2017
    • 11/03/2017 - 2017 Year End Tax Planning Str
    • 10/19/2017 - Tax Preparation is not Tax Pla
    • 09/17/2014 - 2013 Obamacare Taxes for High
    • 09/17/2014 - American Taxpayer Relief Act o
  • Financial Planning
 

INVESTMENT
MANAGEMENT

Our investment management process is focused on helping you maintain financial stability, preventing mistakes and accomplishing your investment objectives. We don’t just focus on market performance or predictions. We focus on what performance means and how it impacts your long-term goals. It starts with returns, but it is about making life decisions. Working together, you gain a degree of confidence when uncertain times come.

Learn More
 

RETIREMENT AND
TAX PLANNING

We help you determine how long to work and when to retire to continue your lifestyle. We analyze when and how to take money from your portfolio to replace your paycheck, with an eye on tax efficiency, spending, healthcare and social security maximization. We address the primary concern of having your money last for the rest of your life.




Learn More
 

HOLISTIC/COMPREHENSIVE
PLANNING

Our comprehensive planning focuses on real life. It’s putting a date to your goals and steering your life based on analysis, giving you choices and alternatives. You gain the ability to see how reachable your goals are. It starts with getting to know you and the way you want things done to fulfill your needs. We take into consideration your family and all the secondary factors that go into a comprehensive financial plan.


Learn More

WE'VE BEEN LISTENING
FOR OVER 30 YEARS

Total Wealth Planning’s team of Certified Financial Planners® are here to listen to you and your questions. We never want you to feel rushed. The real benefit is having a road map to help ensure the key elements of your financial life are in order.


Total Wealth Planning Associations
WE ARE PROUDLY ASSOCIATED WITH

CONTACT INFO


 

WHAT'S NEW AT TWP


       
CORPORATE EXECUTIVES

FAMILIES

PRE-RETIREES / RETIREES

BUSINESS OWNERS

DISCLOSURES
ECONOMIC OUTLOOK

BLOG & NEWS

VIDEO LIBRARY

FORM CRS
   
4665 Cornell Rd. Suite 160, Cincinnati, OH 45241 4665 Cornell Rd. Suite 160, Cincinnati, OH 45241
513-984-6696 513-984-6696
info@twpteam.com info@twpteam.com
Growth triggers fee reductions in DFA funds
Tuesday, November 10, 2020


SEE MORE >

Follow us on Google+
Blog & News
Follow us on Twitter
Find us on Facebook
DISCLOSURES | COPYRIGHT © 2020. TOTAL WEALTH PLANNING. ALL RIGHTS RESERVED.
GET STARTED
READY TO
GET STARTED?