Tuesday Tip: Tax Preparation vs Tax Planning

[Matthew Cervoni]

This week's Tuesday Tip is to know the difference between tax preparation and tax planning. 

Tax Preparation is simply a compliance exercise done once (or twice if you extend) per year. This process consists of filling out government forms and being reactive. 

Tax planning is performed throughout the year and allows individuals and businesses to use government incentives to save money on taxes and build wealth faster than the average person. This process consists of using up-to-date financial data to capitalize on opportunities and is proactive.