There are three stages to a successful tax strategy. First, there is the strategy itself. That’s where you and your advisors look at your current situation and with your goals and objectives clearly in mind, line out the strategy to get where you want to go. Generally, the strategies I work out with our USTaxAid Services clients have immediate steps and longer range steps. We may go as far out as five years, if your goals are big enough that allow us to take some intermediate steps.

I call the initial tax strategy call with my clients the ’30,000 foot view.’ It’s a chance for you to step back and see clearly where you are and where you’re going, based on your current plan. If you’re overpaying on your taxes now because of the wrong structure, missed deductions or faulty tax preparation, it’s only going to get worse as new tax laws come into place and your business and investments grow and mature.

It’s just like having a funny noise in your car. If you just let it go, hoping it will fix itself, it never seems to work. If you fix it in the beginning, you’ll pay a small bill. If you wait until there is real damage, you’re likely to have a much bigger repaid bill plus run the risk of being stranded alongside the road somewhere you don’t want to be. The tax strategy looks for those ‘funny noises’ in your current plan.

But that is only the first phase. The second phase is to implement the changes. For example, let’s say we determine you need to have a different type of business structure so that you can pay less tax. If you don’t properly put that business structure in place in a timely fashion, the strategy doesn’t help you a bit.

And then finally, you need to have a tax return prepared that properly reflects your strategy. For example, I might point out that you’re missing the home office deduction in your S Corporation. There is no home office deduction form in the Form 1120S package (what you use to report your S Corporation) like there is if you have a Schedule C on your individual tax return. So it’s easy to be confused. Where do you take the deduction? If neither you or your tax preparer know what to do in that case, you might just lose that deduction. On average, we find that that deduction will save $2,000 or more in taxes. But only if you take the deduction and report it correctly.

If you don’t have a properly prepared tax return, that strategy didn’t help you.

You need all three steps: strategy and plan development, implementation and tax compliance to have a successful tax strategy that saves you money, protects your assets and still lets you sleep at night.

If you skip any one of these steps, your results simply won’t be as good.