When It Comes to Taxes, It’s
All in the Planning!
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What is Episode 038 All About?
When it comes to Tax Prep versus Tax Planning? Hands down, planning is king!
Host Josh Bretl, founder of FSR Wealth, is showing us the difference between putting together the info we need to file our taxes (always a short-term nuisance!) and positioning ourselves to minimize what we actually owe when April 15th rolls around (a long-term proposition).
As you’ll learn on this episode of Retirement Equals Freedom, whatever stage of life you’re in – from raising young kids to enjoying those golden years – there are important tax implications.
It’s about creating a proactive (and tax efficient!) strategy for investing, drawing down and managing your assets all along the way. Find out how IRAs, 529s, HSAs, RMDs, 401ks – the whole alphabet soup – are part of a holistic, tax-savvy vision for your abundant future!
The show wraps with a quick-fire round of – you asked for it! – “Get to know Josh and Dave” (with apologies to Dave’s mother and Bambi) as well as a DR2R that is more deep dish (pizza) than deep thoughts.
Speaking of deep thoughts, some of the subject matter we tackle can get pretty complex. If you’re wondering whether now is the time to consider hiring a professional, don’t miss our next episode! Josh will be running down the list of things to look for in a qualified financial planner.
If you haven’t already, please sign up for all the news you can use (+ lots of fun) below for the Retirement Equals Freedom podcast newsletter. You might also want to join the conversation at our private Facebook group, which you’ll find here.
Click here to explore the services that FSR Wealth Strategies offers and schedule a discovery call with Josh. When it comes to living your best life, it’s never too early to get started!
Door County, WI. Garden gnomes. Who Would Win?
- Weekend Warriors: Tales of documentary entertainment, like an “out-of-this-world” look at Lady Gaga; mellow stag weekend fun for Dave and his son; and Josh out there playing ref in miserable soccer weather.
- Who Would Win? Crediting the popular kids’ book series that has loosely inspired our episode about Tax Planning v. Tax Prep.
- Defining Terms:
- Tax Preparation is what happens in February, March and April – when you start gathering all your official prior-year tax docs (like w2s, 1099s, etc.)
- Tax Planning is what you do throughout the year in anticipation of tax season – and all about keeping Uncle Sam’s slice of your earnings to a minimum.
- Proactive v. Reactive: A big part of smart financial planning includes taking control of tax strategy throughout the year, minimizing liability rather than just waiting for tax season.
- Ways you can take the tax bull by the horns:
- Tax Loss Harvesting: Managing taxable gains where indicated, as they occur.
- Required Minimum Distributions.
- Charitable gifting.
- Roth conversions.
- You may not have RMDs or Social Security to manage currently, but taking a smart, long-term approach can prevent your future self from owing money to Uncle Sam.
- Other benefits to proactive tax planning?
- A reduction in Medicare expenses.
- Tax-free Social Security payments.
- Avoiding unnecessary fees on IRA and 401k withdrawals.
- A Dying Breed? About the reasons it’s harder and harder to find a qualified CPA to do your individual returns. The good news? Most people’s tax situations are not so complex that they can’t do it themselves with platforms like TurboTax and H&R Block.
- Josh Looks Into His Crystal Ball: Very likely in the not-too-distant future AI (artificial intelligence) will enable the IRS to eliminate tax filing altogether by simplifying and automating the process for most Americans.
- Don’t-Miss Tax Planning Tips:
- Deductions. Are you maximizing?
- Company HSA (Health Savings Account) plan contributions.
- 529 college savings plans (they’re fully deductible in Illinois!).
- Roth IRAs, 401ks and traditional IRAs.
- Withdrawals. Have you got the timing right?
- When to start drawing Social Security.
- Non-qualified investment account draw-downs.
- Deductions. Are you maximizing?
- Timing is Everything! Factor life stages into your tax planning, such as:
- Raising young children.
- Moving towards retirement.
- Enjoying those retirement years!
- Relaxing into late-stage retiree life.
- A Pause for Recognition! We can all agree that Dave Schmidt brings something incredibly compelling, unique (and sweet-smelling) to the FSR Wealth family.
- Let’s get to know Josh and Dave: “What’s the strangest thing you’ve ever seen in the middle of the road?”
- For Josh, it has to be unearthing 10 concrete yard gnomes, a concrete squirrel and a microwave (!) under overgrown bushes in the backyard at his old house.
- For Dave, it was Bambi roadkill on the family’s annual summer road trip to Door County, Wisconsin. His mother’s matter-of-fact reply left him … distraught!
- DR2R (that would be, Dave Relates 2 Retirees!): Lest you think Dave is living a reactive life, he in fact takes seriously (and proactively prepares for) his role as purveyor of pizza at gatherings of friends. He’s the pizza equivalent of a proactive tax planner! Josh agrees, sort of. But tax planning provides way more value-add to retirees (and soon-to-be retirees) than ordering two large cheese pizzas at a party. So there’s that.
- Stay Tuned for Next Time: What to look for when hiring a financial advisor!
“You go through this annual ritual of preparing your tax return and it’s a giant pain in the butt. People think this is hard to do and it is – it’s not the easiest thing. The IRS makes it complicated.” ~Josh
“Tax planning is something you can control. It’s something you can take control of!” ~Josh
“I don’t want to steal your thunder, but I’m going to be proactive – not reactive!” ~Dave
“Tax planning) allows you to take steps throughout the year to minimize taxes you know are coming – and it may not be just this year, but for the rest of your life. Especially for retirees, now is a great time to do that!” ~Josh
“Tax preparation is just taking whatever you did in the prior year and reporting it to the IRS …
“As you go through life, you have to realize that your life circumstances change and the tax rules change.” ~Josh
“Tax preparation is something you’ve got to deal with, but it’s not nearly as important as tax planning … which provides real value and life-changing opportunity to your financial picture.” ~Josh
“If you’re truly going to own your retirement, what should you be looking for and what shouldn’t you be looking for? … Our next topic will be a proactive approach, if you will, to hiring the right person to help you.” ~Josh
- Check out Jerry Palotta’s popular series of kids’ books, "Who Would Win?"
- Interested in trying DIY tax prep? TurboTax and H&R Block are two of the biggies.
- Click here if you would like to learn more about the Schmidt family vacation spot: Door County, Wisconsin.
- R=F's new private Facebook group. Come hang out!
About your Co-Hosts
A certified public accountant, Josh Bretl has spent the past two decades growing FSR Wealth Strategies into a firm that specializes in tax-focused retirement planning. Because taxes have the single biggest impact on how much you can spend in retirement, Josh is dedicated to developing individualized financial plans that extend and grow his clients’ retirement savings. Based in Elmhurst, Illinois, FSR Wealth strategically preserves and maximizes resources through tax-efficient strategies designed to fulfill retirement dreams.
Apart from producing and co-hosting The Retirement Equals Freedom Podcast, Josh's longtime friend Dave Schmidt is marketing director at FSR. He’s also a content provider and marketing adviser to local businesses and nonprofits. He’s also an advocate for t-shirts, all things 90s (especially the music), short walks and long naps.
FSR Wealth Management is a registered investment advisor located in Elmhurst, Illinois. Information and opinions contained in this audio have been arrived at by FSR Wealth advisors. All information herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, a solicitation or recommendation to purchase any security. FSR is not providing legal, tax, accounting, or financial planning advice in this audio. These views are as of the date of this publication and are subject to change.
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