The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: grignaak on February 01, 2014, 08:43:46 PM
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Mustachians:
Does anyone here use a tax planner?
But first, lets get some definitions out of the way:
- Tax Preparer: One who looks at last year's taxes and tries to salvage whats he can.
- Tax Planner: One who looks at a few upcoming years' finances and comes up with a plan to reduce taxes.
- Financial Planner: One who takes charge of your investments and such, and I don't know what because I do it myself, thanks.
A Tax Planner is what I'm talking about; fee based; works for me and not some investment firm. Anyone have good/bad experiences. Reasons to not to?
FWIW, I interviewed one on the phone the other day. I told him my savings percentage and he said "Oh! Do you do Mr. Money Mustache?"
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I don't use one, but my income streams are not too complicated. And I recently got into learning the tax codes to do it myself. If I put a dollar value on my time, I'd probably be better off hiring a pro. But I think it's kinda fun and interesting. I've heard lots of people say that a planner can save you significantly more than they charge.
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You can if your situation is truly complex, but most people would be better serve to pay now with their time in learning about their taxes and reap the dividends in lower taxes in future years, without having to continually revisit the tax planner. Plus, there are lots of folks here who would be happy to help, myself included.
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I learned most of this myself. stuff like deferred tax options are pretty simple to pick up online. I personally would only do it if you have a complicated situation like you own a corporation and want to maximize the strange parts of the tax code like safety awards. Just sanity check the info first.
I worked with a company who did tax planning and it was the biggest waste of money for the owners IMO. They set the up with multiple C corps, tried to funnel money through an ESOP and the rules kept changing so this wasn't legal for too long after setting it all up, had them contributing to whole life insurance, etc. The thing that made it really bad is they were growing their business and bought another company so they didn't have the cash flow to even realize the plan they spent so much money setting up (with the corps and ESOP).