While many assume that tax preparation and planning are the same, they are not. Tax preparation refers to the process of preparing and filing your tax return by the IRS deadline each year. In most cases, tax preparation is a one-time event that concludes with signing your return and discovering whether you owe the IRS or are eligible for a refund.
Unlike tax preparation, which is an annual event, tax planning is a year-round process that revolves around forward-thinking and strategic foresight. It is a distinct service aimed at minimizing your tax burden through proactive measures. Tax planning involves projecting into the future, allowing individuals and business owners to capitalize on opportunities and make informed decisions that optimize their tax position.