Time and time again, we have read Benjamin Franklin’s famous quote, “But in this world nothing can be said to be certain, except death and taxes.” So…we skim or read the words following this famous line and still…and…we pay taxes. Why?

An anonymous high-priced tax attorney once stated1 – and accurately – that: “The best and finest tax planning is done by people who have more money than they’ll ever spend or be able to give away. The worst tax planning is done by nice middle-class people who have middle-class virtues, those who have to work hard and save and sacrifice.”

That is not to say that the super wealthy do not pay taxes. We all have to pay taxes. However, Uncle Sam provides us with several opportunities to minimize the taxes we owe. The question is, do you know what those opportunities are? The super wealthy can afford a team of professionals hired specifically to know what they are, and how and when to take advantage of them. The rest of us, however, hardly have the time and/or the money to visit a doctor for a minor injury, let alone hire a tax specialist. As a result, we only get bits and pieces of solid information about our tax situation. The super wealthy typically have a quarterback – or wealth manager – at their disposal, one who is well acquainted with their present situation and future, feelings and family dynamics and is able to coordinate a proactive team parallel to their goals. This winning team often includes an accountant and/or CPA, and a tax attorney.

The Internal Revenue Code has become extremely complex as it has attempted to address every road we travel during our Life, and even after our Life. Moreover, tax laws are continually changing. In other words, tax planning is hard! Consequently, millions of Americans pay taxes that they shouldn’t have to pay simply because they don’t understand or know the tax laws. So, who does? Your CPA or accountant? Your financial planner? Or your tax attorney? There is so much complexity in tax planning that few, if any, of these professionals can single-handedly know everything that needs to be known about taxes. This is why the super wealthy have an advantage. They have a team of all these professionals.

So how can you get the same advantages as the super wealthy without their deep pockets? Step one: go back to the basics…. Life Planning. A few weeks ago, you read that Life Planning is centered on the questions that you don’t know to ask that need to be answered. For instance, did you know that if you volunteer delivering meal-on-wheels in your own vehicle, you may deduct 14¢ per mile this year? Or that there are several “Residential Energy Tax Credits” that were extended beyond 2007? These tax breaks generally relate to solar of fuel cell credit for generating power or heating water… but not for your swimming pool or hot tub. Federal income tax alone is one of, if not the biggest, annual expense for middle-class families in the U.S. So take the time to do a bit of self-examination and planning. A Life Consultant can help you discover these questions, map out avenues to minimize your taxes and perform as your quarterback with other tax professionals to prepare for future tax situations.

And by the way… tax planning is not just about income taxes. As I mentioned earlier, the IRS is standing on every corner in your Life just waiting for you. In fact, tax planning can be applied to all the 15 Life Planning Issues we address. Say, for instance, you decide to take a class that ramps up your job skills in your current profession; you might qualify for a deduction for unreimbursed business expenses, under the miscellaneous itemized deductions category. Certainly an added incentive to consider going back to school and taking your job or your business to the next level.

No matter what the circumstances, tax planning should always be a proactive process. After all, once it’s paid, Uncle Sam doesn’t like to give your money back.

1 Kiplinger, January, 2008.