All planning – but especially tax planning – should line up with your goals. You should never do anything solely because you’re going to get a tax benefit. Rather, you should always do things that tie back to your goals, with tax benefits being an added bonus.
But when it comes to goals-based tax planning, it’s important to keep a few things in mind. First, we haven’t yet seen any legislation pass in Washington that might impact your taxes, but it’s important to stay informed about what’s going on. Second, because there hasn’t been any legislation passed, you should work with your financial professional on goals-based tax planning strategies based on the rules that are still in place. And finally, when it comes to tax planning, it’s key to stay proactive and flexible.
Let’s take a deeper dive into each of those things and how you can make the most of this tax season and proactively start planning for next year.
We still have the element of uncertainty when it comes to what exactly is going to happen with legislation that might impact your taxes. We don’t know when – or even if – the Build Back Better Act is going to pass. We know that it’s currently held up in the Senate and that if it does end up passing, it won’t be the version that we originally saw.
According to the Tax Foundation, there are a few elements in the Build Back Better Act that could potentially impact your future tax planning, including:
The key is to pay attention to proposed legislation without overreacting or taking drastic action based on what might happen. The goal of staying informed is to be prepared to act on any potential tax law changes. This is also why you should have a trusted advisor who can help you interpret the information and prepare you based on your unique situation.
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