Its tax time: 3 ways the pros can help you save this year

StatePoint As tax season unfolds, you might wonder how an effective tax strategy can assist in achieving your financial objectives, whether you're a young professional filing taxes for the first time or nearing retirement.

During tax time, prioritize this aspect of your financial plan by engaging with a Certified Financial Planner™ professional. Here are three ways a CFP® professional can help you maximize tax deductions, tax credits and tax-advantaged accounts.

Avoid Surprises Receiving a tax refund may seem advantageous, but it actually means you've provided the government with an interestfree loan. On the other hand. owing a large tax bill is equally undesirable. A CFP® professional can assist in fine-tuning your tax estimates or withholdings to achieve a more balanced outcome at the end of the year. If you do receive a refund, they can guide you in reinvesting that money effectively within your overall financial strategy.

Plan for the Future The maximum employee deferrals to defined contribution plans like 401 (k) s and 403 (b) s have significantly increased. A CFP® professional can help you ascertain the optimal monthly contribution amount to effectively shield more of your income from taxes. This strategy is particularly beneficial if you're close to a higher tax bracket; reducing your taxable income may shift you into a lower bracket, resulting in savings. Additionally, increasing your deferrals can significantly enhance your retirement readiness.

Become a Strategic Giver If you're accustomed to filing taxes annually, you might have noticed the high threshold for claiming deductions on charitable donations. For 2023. the standard deduction is $13, 850 for single filers and $27, 700 for married couples filing jointly. A CFP® professional can advise you on establishing a donoradvised fund to "bunch" your donations, allowing you to qualify for deductions immediately. This method is not only tax-beneficial for you but also advantageous for your chosen charities, as it lets your contributions potentially grow before allocating them.

CFP® professionals stay abreast of the latest changes in the tax code that average investors might not be aware of. Navigating the complexities of taxes is a crucial aspect of financial planning. With a financial advisor's guidance, you can avoid surprises, preserve more of your hard-earned money, and position yourself effectively to achieve your goals. To connect with a CFP® professional who is committed to your best interests during tax season and beyond, visit Lets-MakeAPlan.org