Tax season can be a complex and stressful time for individuals, families, and businesses alike. With so many elements to consider for each tax return, it can be difficult to determine if you are completing your return correctly. That is why many individuals and businesses turn to professional tax services to assist them with their tax returns. As a leading provider of tax services for all types of clients, the team at Leskun & Son Accounting knows how important it is to choose the right tax service. That is why our team has provided some information to help you understand the differences between tax preparation and tax planning and choose the right service for your needs.
Learn about some ways to improve your tax refund.
What is Tax Preparation?
Tax preparation is typically an annual one-time process where your accountant will prepare your tax return for filing by the tax deadline. This process requires various documents including income documentation (T4), investment documents, and retirement plan statements.
Some of the benefits of tax preparation include:
Tax professionals can help you maximize your deductions and tax credits, allowing you to keep more money in your pocket.
Completing your tax return independently can require a lot of time and effort. By choosing a professional to handle your taxes, you can complete this process faster while ensuring the same level of care and accuracy.
Enhanced Attention to Detail
Errors in your tax return can put you at risk for audits and penalties. When a tax professional prepares your taxes, you can be sure that they are utilizing the utmost attention to detail to reduce your chance of filing an erroneous return.
What is Tax Planning?
Tax planning is a process that is focused on creating strategies to minimize your tax liability. While tax preparation is a one-time process, tax planning can occur multiple times throughout the year. When you work with a tax planner, they consider current tax laws, new tax laws, and your current situation to minimize tax liabilities while staying within the current tax regulations.
Some of the benefits of tax planning include:
Reduced Tax Liability
Using a tax planning service ensures that you are taking advantage of the right tax credits, using tax-loss harvesting techniques in your investments, and managing your wealth accordingly.
More Estate Planning Flexibility
In most cases, leaving money for your heirs in your will can complicate their tax situation in the future. Tax planning can help you reduce the tax liability of your heirs, allowing for more flexibility in estate planning and distribution.
Better Understanding of Your Investment Returns
Capital gains, expenses, and even inflation can ruin your investments, leaving you with less than anticipated. Tax planning helps you understand why these losses or gains occur, allowing you to make more informed investing decisions.
To learn more about tax planning, tax preparation, or our other tax services, get in touch with the team at Leskun & Son Accounting. We can be reached through our online contact form and will be happy to answer any questions you may have regarding our services.