Tax preparation is the process of preparing and filing a tax return for Federal and State reporting requirements.  It is generally a one-time, annual event that may include other filings such as sales and use tax, lodging tax, highway use tax returns or other specialized returns that are typically required for various businesses.

Tax preparation is a process that uses information of your financial activity throughout the previous year.  The main goal is compliance and ensuring that the taxpayer receives all the credits and deductions they are entitled to. 

This process is generally completed “after the fact”, which doesn’t allow tax planning, except in some limited cases such as retirement plan contributions, which, in some cases, can be contributed up to the due date of the return.


While tax preparation is an annual do it and forget process, planning can be year-round and is a separate service from tax preparation.  Planning helps you optimize your tax situation BEFORE reporting.

Tax planning can be a quick end-of-year process where examples of strategies might include bunching expenses, use of tax-loss harvesting to offset investment gains, increased retirement plan contributions to defer income and best timing for capital expenditures to reap the tax benefits.  Here you emphasize defer, deduct and depreciate.

More advanced planning is more of a deep dig into the taxpayer’s financial situation to look for opportunities for more complicated strategies.  Here you might see one or all of the following used:

  • Timing strategies, such as bunching expenses into a single year
  • Shifting strategies, such as when your business hires your child or your parent
  • Code-based strategies, where you take advantage of tax breaks written into the tax code.  The best known example of this is probably the Section 121 exemption for sale of your home. 
  • Product based strategies such as life insurance, annuities, cost segregation of rental properties,  or purchase of passive income generators to offset deferred rental expenses for high income rental property owners.

Simpler planning sessions are usually held in November and December to ensure that the taxpayer implements identified tax-savings steps before the end of the year.

More complicated planning sessions usually take place earlier in the year to ensure there is time for implementation of prescribed changes that are discovered in the deep review of taxpayer finances.  Sometimes it takes a year or more for implementation but returns are excellent.

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If you're an individual, a family or a small business, we can help you with all your tax needs.  Contact us today to see how we can help.