INVESTMENT PLANNING
Are you paying more than you should? How smart tax strategies can affect your portfolio.
Because of today’s highly progressive Federal income tax structure, tax planning can be a meaningful way to increase your discretionary income. Many of our expenses are fixed (i.e. food costs, mortgage or rent payments, insurance premiums, utilities, etc.) and can be adjusted only slightly.
On the other hand, the amount of tax you pay is very flexible and can often be reduced. Tax saving techniques can be broken down into four major groups:
- Tax elimination
- Tax reduction
- Tax deferral
- Tax shifting
Techniques that result in lowered taxable income, or in economic benefits that are not taxable, are perhaps the most desirable because they avoid taxes altogether.
In addition to the tax reducing incentives some investments produce, investments should also be analyzed from the standpoint of hedging inflation through conservation and appreciation of capital.
There are, of course, many investment vehicles ranging from high risk tax shelters to low risk bonds. The suggestions and recommendations in this section of a financial plan are normally tailored to fit your particular situation taking into account what best suits your needs, emotions, and risk tolerance.
Developing an Investment Portfolio
Investment Portfolio Management |
