Tax and investment planning are critical to a successful financial plan. However, in most financial plans, the tax guy does not talk to the financial guy and inevitably plans are not as successful as they could be. When you sit down for your annual update with your accountant and then again with your financial advisor, make sure each side is talking to the other because by 2013 the tax and investing landscape will most certainly be different than it is today. Your goal should be to develop a strategy, a plan to implement in order to take advantages of opportunities now.
The good news is that you have until the end of 2012 to plan for changes set to take effect. Remember, Congress extended the current tax landscape for another two years in December 2010, but most certainly there will be changes.
Here's my most recent newsletter on The Investment Tax Landscape: Countdown to 2013. One tidbit could be the popularity of municipal bonds in portfolios over the next two years. Municipal bonds pay tax-free interest at the federal, state and local levels for residents investing in their own state municipal bonds. If tax rates go up, municipal bonds could become even more attractive.
Congress gave us all another two years under the current tax law to plan. Don't wait; update your financial plan now.
Tom Taylor, CPA is a fee-only, independent Financial Planner and Certified Public Accountant and can be contacted at Chesapeake Financial Advisors or Taylor & Company in Towson, MD. Tom believes that the greatest benefit of planning includes incorporating tax strategies with financial planning. Tom’s clients receive both services in one advisor. He is a member of NAPFA and the MACPA and AICPA.