F**king Taxes
BLUF:
Tax time is not the time to plan but its a great time to start for next year
Higher Earners receiving W2 income need to be diligent in their tax planning to avoid large tax bills
Having a great accountant (CPA or EA) who is familiar with tax planning is extremely vital to your financial success
Team,
I have said this time and time again, but let me repeat myself, I hate taxes.
To me, there is nothing enjoyable about tax time. As an employed physician receiving a W2 each year, there are not a lot of ways I can reduce my tax exposure , besides withholding more money via my W4 each month.
However withholding more has its drawbacks.
First, who wants to give the government an interest free loan throughout the year?
Second, withholding more money means less money available for saving, investing, and for my family.
Yeah… neither of those things are appealing for me.
So, what do we do about taxes?
Well, the first thing to do, is to start planning for your taxes the year before you have to pay them.
By the time you file your taxes, its too damn late.
What’s done is done, and you’re going to need to figure it out. You don’t want to be in this situation, trust me.
However if you find that you’re in that situation, your goal should be to make sure you don’t repeat the same mistake the next year.
So, start planning.
There was a great article that came out last year about the wealthy and how they legally avoid taxes. You can read my summary of that article here.
You’re likely going to have questions after reading my post.
Which is fine.
So the next thing you’re going to do is… that and have a general sense of what you need to do…
FIND A DAMN GOOD CPA OR EA WHO UNDERSTANDS TAX PLANNING.
I can’t stress how important this is.
Too many folks, spend ridiculous dollars and time utilizing services from H&R Block, Turbo Tax, etc, when a CPA or EA would serve their needs better.
In fact, it might even be cheaper to use an actual accountant.
We often forget that as our income increases, so does our tax bills. As such, we can use the same services that weren’t meant for higher income levels to start with.
High income = High Taxes = Big headache if you aren’t playing the game correctly.
Stay on top of your tax exposure because it’s easy to get behind.
I learned this the hard way while I was in residency and it took me 2 years to recover from that mistake.
Every year, come tax time, I reminded of that mistake.
And every year, I say, never again.
So be better than me. Learn from my failure to plan.
Very Respectfully,
D. Rhoiney DO
SurgiFI