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10:37 a.m. April 13, 2014
Tax efficiency and proactive planning
Tax planning is a year ‘round activity.

will parrishUnless you extend your tax return for 2013, you, like most Americans are probably enjoying the fact that your taxes are filed and complete. Now is a great time to implement some easy strategies to improve your filing for 2014.

May is a great time…to sit down with your CPA. Your returns are still fresh in your mind and theirs. The things that worked well, and the things that “stung” can be reviewed now, and as a team, you can prepare for 2014 proactively.

Plan Ahead. Financial planning has become a catch-all phrase, however most Americans think of only investments. Having a well-thought-out financial plan, working with a qualified advisor, can unearth a variety of strategies for you and your family. After reviewing 2013 with your CPA, visit with your financial planner.

Double-Duty Dollars. All of us think about saving enough for retirement. Accumulating finds for the future is important, however there are a great deal of tax benefits that can be derived from having a retirement plan through your company, or if you are a 1099 income earner.

Keep it in the family. If you own a business, a medical practice, or a dental practice, you can leverage your family relationships in a variety of ways. Many physicians hire a skilled spouse to perform duties in the office. For example, if your spouse is a qualified bookkeeper, hiring them to keep your personal accounting up to date allows you to pay them and possibly make retirement plan contributions on their behalf, which could reduce your personal tax liability.

Investments and Tax Planning: Everyone wants their investment portfolio to perform well. But it is your after-tax return that really matters. If your portfolio earns you double-digit returns, those returns really aren’t so great if you end up losing 20% or 30% of them to taxes.

One possible method for realizing greater tax efficiency is simply to minimize buying and selling to reduce capital gains taxes. The idea is to pursue long-term gains, instead of seeking short-term gains through a series of steady transactions.

A basic tactic intended to work over the long run is to place tax-efficient investments in taxable accounts, and less tax-efficient investments are held in tax-advantaged accounts. Of course, if you have 100% of your investment money in tax-deferred accounts, then this isn’t a consideration. Depending on your income, your options could be limited, so chat with your CPA and financial advisor to get a clear picture of your personal options.

For a free copy of our “2014 Tax Guide” email Will Parrish at will@sdp-planning.com.

This article is not intended as a guide for the preparation of tax returns. The information contained herein is general in nature and is not intended to be, and should not be construed as, legal, accounting or tax advice or opinion. No information herein was intended or written to be used by readers for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Readers are cautioned that this material may not be applicable to, or suitable for, their specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. Readers are encouraged to consult with professional advisors for advice concerning specific matters before making any decision.

Conrad Slate, Rick Disharoon, and Will Parrish are Representatives with Cambridge Investment Research and may be reached at (865) 357-7370, by email or www.sdp-planning.com. conrad@sdp-planning.com, rick@sdp-planning.com, will@sdp-planning.com 9724 Kingston Pike, Suite 701 Knoxville, TN 37922 Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Slate, Disharoon, Parrish and Associates LLC are not affiliated.

Published April 13, 2014

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