Hey, the year-end is fast approaching!
You need to start planning for the coming year now.
Delay might be dangerous. Some unexpected activities may pop up and you may not be able to resist them. So, if you want to take good advantage of your leisure moment, it pays to start learning how you can plan for your personal plan.
If you must get started now, you need to start from somewhere.
Maybe starting from the basics will be better.
Simply put, personal tax planning is the process of analyzing your financial plan from a tax perspective. In other words, it is the process of analyzing finances from a tax angle, with an aim to ensure there is maximum tax efficiency.
Please note that personal tax planning entails understanding the timing of income as well as expenditure. Before you can plan your tax payment, you need to define your source of income and expenditure. Also, you need to be able to streamline your tax payment so you can diminish tax liability and eventually end each year with more funds.
Analyzing your financial plan from a tax perspective can be done on a long-term or short-term basis. When you plan your tax on a shorter-term basis, you’re simply planning how to execute your tax at the end of the income year. However, if you’re planning your tax on a long-term basis, you’re creating a tax plan that can be executed at the beginning of the income year.
Almost all personal tax planning falls on a short-term basis. So, your personal tax will also be based on a short-term basis.
To plan your personal tax, you will need to take the following steps:
Since the tax rate changes nearly every year, tax planning would help you anticipate the tax rate fluctuation and take good advantage of it.
Also, if you can plan your personal tax appropriately, you will be able to easily :
As you can see, tax personally tax planning is highly beneficial. So, you shouldn’t have any excuse for not planning your personal tax.
Perhaps you need further help regarding your personal tax planning, feel free to request for help here.