Have you taken the time to sit down and go through all the ways you could save on taxes?

It cracks me up when I hear people say they hate paying taxes. While we understand this frustration, we challenge this sentiment by asking our clients and prospective clients:

“Have you actually taken the time to sit down and go through all the ways you could save on taxes?” “Do you have a tax plan, a tax plan for the tax man?”

For starters, have you:

1. Organized your financial documents? Kept track of all your expenses?
2. Reviewed the last two year’s tax returns with a professional other than your own accountant or yourself?
3. Maximized your retirement contributions?
4. Stayed Informed of all the changes in tax law that are occurring?

These are just to name a few.

Perhaps paying taxes is an absolute vs. a relative problem.

I ABSOLUTELY want to pay taxes because that means I made money…on the other hand…I want my contribution to be RELATIVELY small (or zero) as a percentage of the money I make.

Dad loved the Beatles, and Taxman[i] cracked him up. He was a warehouseman, and although he paid his blue-collar income tax, he was the first to laugh at the wealthy when they complained about paying taxes.

Even my blue-collar dad knew it was good for me to grow up and pay “absolutely” higher taxes. But he also said I should not listen to him; I should call so and so. He makes a lot, and never complains about taxes. In essence, he said I should learn how to pay “relatively” less taxes. Dad had no college degree, but come on, no college degree is required for simple logic. All you need is some common sense, initiative, and some planning with financial professionals.

We cannot control the tax code, but we can play the cards that we are dealt and shift our way of thinking. I learned my first lesson on reducing taxes as a young W-2 earner just starting out at my first job; the amazing benefits of deferring taxes by maxing out the contribution to my retirement savings plan, so max it out I did. While this simple technique seems like a no-brainer, I am amazed time and again that some of the highest earners I know do not take advantage of this one easy tax savings technique yet complain about paying high taxes.

Once I maxed out my retirement savings, I went looking for more ways to improve my absolute and relative position for paying taxes. I looked at my options and while I clearly wanted to earn more and I wanted the money I had started saving to earn more, both earnings and the earnings on my savings were taxed at ordinary income tax levels. That tax bite became too much for me to bear. I wanted to grow my wealth and pay little or no tax. Bring that on… I would go on to spend the next 20 years thinking through how to absolutely compound my wealth and relatively reduce the tax bite. And I will continue for the next 20 years and beyond thinking through how to absolutely compound my wealth and relatively reduce the tax bite.

There are many reasons Warren Buffett has famously stated that he pays a lower tax rate than his secretary. I was and still am driven to find them all, and then some.

If you care to join us on our quest to make more money but pay less in taxes, then make a 2023 Tax Day promise to yourself – “This week, I will begin to start planning to make more but pay less come Tax Day 2024”.

So, I ask again, have you actually taken the time to sit down and go through all the ways you could save on taxes? If you have not, then come work on your plan with us. Happy Tax Day! Or should we say, Happy Lower Tax Day!

Lyrics to The Taxman

[i] One, two, three, four
One, two (one, two, three, four)

Let me tell you how it will be
There's one for you, nineteen for me
'Cause I'm the taxman
Yeah, I'm the taxman

Should five percent appear too small
Be thankful I don't take it all
'Cause I'm the taxman
Yeah, I'm the taxman

I'll tax the street
(If you try to sit, sit) I'll tax your seat
(If you get too cold, cold) I'll tax the heat
(If you take a walk, walk) I'll tax your feet
(Taxman)

'Cause I'm the taxman
Yeah, I'm the taxman

Don't ask me what I want it for
(Ah, ah, Mr. Wilson)
If you don't want to pay some more
(Ah, ah, Mr. Heath)
'Cause I'm the taxman
Yeah, I'm the taxman

Now my advice for those who die (taxman)
Declare the pennies on your eyes (taxman)
'Cause I'm the taxman
Yeah, I'm the taxman
And you're working for no one but me (taxman)

Source: LyricFind

Songwriters: George Harrison

Taxman lyrics © BMG Rights Management, Sony/ATV Music Publishing LLC

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