Back to Basics Fun Educational Review – Part Eight and Final – Tax “PLANNING” … The Key is the Second word… Planning!

Welcome back to Part Eight and final of our “Back to Basics” series … we hope you’ve enjoyed the First Seven which started with all about “The Emergency Fund” in Part 1Part 2 being “Protection Planning” and Part 3 discussing All about Debt Planning or “The Good the Bad and the Ugly of Debt”, Part 4 Retirement PlanningPart Five, Back to Basics Education Planning, Part Six, Estate Planning Made Easy , Part Seven KISS Investing and now, with no further ado Tax Planning !

Tax Planning – The Key is the Planning

Welcome to the final part, for now, of our back to basics fun high-level financial planning series, we close this initial series out with Tax Planning!

In keeping with our high-level, most important, basics theme… in this special tax planning article, while we know there are tons of allegedly crafty techniques, sometimes we would call them gray, we want to stick with the basics of blocking and tackling as you can REALLY save a ton staying in the lanes, but just paying extra attention here and there….

So here we go:

Coincidentally, the most important part of Tax Planning is the second word in the subject, Planning!

As we individual or corporate tax payers traverse the tax year, it’s important to take note of unusual events that may be occurring. We’re certainly not saying you have to worry about this every minute of the day, but should you have an unusual increase in income, or decrease in income, this should be thought about before the end of the year for your tax planning.

Higher or Lower Income Years

As an example, a sudden increase in income may garner heavier donations, absolute confirmation of maxing out all pre-tax retirement vehicles, double checking your withholdings compared to prior years in what you may have owed or received as a refund, just to name a few.

On the inevitable lower income years you may want to do just the opposite, think twice about making donations, double check your withholdings to see if they are too high, we would certainly like you to max out all pretax retirement vehicles if possible, but not at the expense of our emergency funds as mentioned in prior episodes of the series.

The Actual Return – Scan that dude before signing and Filing

Always take a moment to scan your final return before filing it. Or if you’re using a tax professional or tax software, it’s always a good idea to review, once again the basic blocking and tackling on your actual tax return before filing.

Things that you want to make sure are correctly included on your tax return:


All income from all sources, this sounds simple but it’s super easy to miss especially in a job change year or retirement year.  The IRS easily picks this up in the form of a paper audit due to a miss match of income.  This includes proceeds from any type of sales, such a stock or other capital gains or any other income receiving asset.

Don’t Miss that Basis – Most all assets have them and the IRS does not

With regards to the prior points, double check that the basis has been entered on anything you may be paying capital gains. In certain instances there are no basis, but most of the time there is a basis on any capital asset that you may have, and if you forget to put it on your tax return the IRS has absolutely no way of knowing that you have a basis in it and therefore you will be paying unnecessary taxes that you otherwise would not.

Confirm You have Credit for Withholdings- Delayed Refunds

Lastly, with regards to the return, reconcile your withholdings from all sources and make sure that your return has all of the withholdings that you may have already sent the IRS. Unlike the prior subject, the IRS will notice a mismatch and eventually give you credit, but there could be months if not years of delays.

Don’t Ignore a Notice – The don’t usually bite

If you ever do receive a notice from the IRS, while it seems obvious, do not ignore it. If you ignore an IRS notice you are basically accepting their argument. If you notice it is correct pay it .. if not send a response. Over the decades of working with the IRS, we have found them to be very friendly and with good responses …usually very accommodating.

All right, there you have it the most important part of tax planning, is just that, planning in advance or maybe along the way. With a little foresight and a mild top of focus throughout the year, we feel certain you can Keep those taxes to a minimum…

Stay Tuned Here for Updates

Oh, one last thought, as long as you are receiving our regular posts here at Street-Cents, we constantly attempt to update everyone on actual, not probable or not maybe legislated, but actual tax law changes… so be sure to read our triple weekly posts…

That’s a Wrap for Now!

There you have it…. A complete Back to Basics from the ground up Financial Planning Review like Course….

Hope you enjoyed!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



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