Tax planning and tax optimization are often used interchangeably, but they serve different purposes in the financial world, says Jonathane Ricci.
TORONTO, ONTARIO, CANADA, Nov 2, 2021 /EINPresswire.com/ – Tax planning and tax optimization are often used interchangeably, but they serve different purposes in the financial world, says Jonathane Ricci. Both are critical factors in your overall financial planning as you prepare for retirement.
With the right tax optimization and planning, you can protect your accumulated wealth and keep as much of your retirement income as possible.
What is tax planning? Jonathane Ricci explains
Tax planning ensures that you have given some thought to your target retirement income and investment income with regard to the level of taxation. If you forget to consider current tax laws, you may be unpleasantly surprised when you start withdrawing your investments and retirement accounts, warns Jonathane Ricci.
You can take advantage of tax planning to save as much money as possible – for retirement or other investment goals that you are working towards. A complete tax plan involves many considerations. Tax optimization is one of these key components.
When planning your tax – usually with the help of a trusted financial advisor – you should set your investment goals, assess your tax liability and investment risk, and look at your financial portfolio for tax efficiency.
What is tax optimization?
If tax planning is the strategy, tax optimization is the star tactic. In other words, once you have a tax plan in place, start that plan with Tax Optimization. This means that you remain aware of tax efficiency in your investment decisions. These details are all examples of tax optimization, from the investment decision to the investment to the tax return.
The aim of tax optimization should always be to reduce your tax liability, plan taxable events and ensure tax compliance. There are many ways to optimize your taxes, depending on where you live, how you earn your income and how your household is set up.
Make sure you consult a financial advisor, asset manager, or other trusted advisor to ensure that you are really taking advantage of all of the tax optimizations available to you, advises Jonathane Ricci.
Keep in mind that there is no one tax plan or set of tax optimizations that will work for everyone. Everyone’s financial situation is unique and you must work with and about your specific financial circumstances.
A good tax professional can help you set up the legal entities needed to protect your retirement income – trusts, foundations, life insurances, etc.
Jonathane Ricci is a business consultant based in Toronto, Ontario. He specializes in tax optimization and asset management for his clients.
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Jonathan Ricci, INTERNATIONAL CONSIGLIERE
November 02, 2021 at 16:54 GMT
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