Focusing on Long-Term Tax Planning

You can create your own personal tax strategy around your financial and lifestyle goals. Just keep in mind the 3 basic tax planning ideas. For example, the first strategy is reducing income. You can reduce income by taking a lower-paying job at a non-profit or by increasing your 401k contributions the next time you get a raise. You can also reduce your taxable income by investing in dividend-paying stocks (thereby shifting some income into a lower tax bracket) or by investing in tax-exempt municipal bonds. These would all be excellent tax strategies for someone interested in building long-term savings and investments.

But perhaps you want to go to school or raise a family. Those are also excellent tax strategies. So ask yourself, what do you want to do this year? And find a tax strategy to make that goal pay off come tax time.