Introduction to Tax Strategy


Introduction to Tax Strategy

Nobody likes to pay more taxes than necessary. As you know, tax laws change often and next year may contain some of the largest changes to tax law in a long time. Therefore, lowering your tax bill involves careful planning. In fact, there’s hardly an aspect of your financial situation—savings, education, real estate, investments, retirement funding, and estate planning—that isn’t influenced by changing tax law.

In recent years, historic tax reform has provided significant savings for individuals, families, and investors. However, many of these opportunities are temporary, and unfortunately in a 2015 study by the National Consumer Law Center, after mystery shopping tax preparers, over 93% of tax returns prepared by paid preparers had errors.

We want to help you get what’s rightly yours.

This information has been developed to help you make the most of current, temporary tax breaks. In addition, we offer time-tested tips that cover every aspect of your financial situation in the short- and long-term. Our goal is to help you minimize your tax liabilities and maximize your potential savings.

Life Changes

Have your circumstances changed in the last year? If so, you may be a good candidate for tax planning. As you begin preparing your taxes, take a stroll down the front of Form 1040, and think about the life changes you have experienced in the past tax year.

Have you married or divorced in the past year? Near the top of the form you must declare your filing status (single, married filing jointly, married filing separately, or head of household), which determines your marginal tax rate (the rate at which your last dollar of income is taxed).

Have you had a child, adopted a child, or assumed caregiving responsibilities? If so, the number of exemptions you claim, or dependents you support, may change.

Have you changed jobs, started a home business, or rented out your second home? There are more than a dozen types of income that you must report, as applicable to your situation.

Have you made payments on a mortgage, incurred medical expenses, or donated to charity? At the bottom of the form, you will list any deductions, which in turn reduce your total income to adjusted gross income (AGI).

As you can see, life changes are relevant to planning your tax strategies.

The Importance of Timing

Waiting until just before April 15 to start thinking about your taxes may prove to be a costly mistake. Like your financial strategy, your tax strategy operates in two time frames—now and later. “Now” covers the 12 months of the current tax year.

The specifics of your income and the deductions available to you will certainly change from year to year according to your changing circumstances, and you may be able to save money now by making small changes.

“Later” covers long-range tax strategies that benefit your future, such as maximizing the tax-deferred savings offered by a qualified retirement plan like a 401(k). Either way, timing is critical, and your planning can make a significant difference.

By coordinating your tax strategies with your life changes and financial strategies, you may accomplish a variety of goals, such as buying a home, funding a child’s education, and funding your retirement.

One of the services we offer should you decide to work with us is a tax planning strategy to help you keep more of your hard-earned money.

If you would like to find out if you’re a good candidate for tax planning, book your free call with us today at During our chat, we will not only help you get clarity on whether you’re a good candidate for tax planning, but also whether there are any other areas of your retirement planning situation that we can help you identify for improvements.

We are here to help. Book your call today:




Keep It Simple Financial Planning is a fee-only fiduciary registered investment advisor located in the heart of Orange County, Santa Ana, CA. We help clients that are concerned about running out of money in retirement create a plan to retire with confidence. 


Happy Birthday to the Roth IRA.

Yesterday was my birthday but it was also another important day in history. The birthday of the Roth IRA. Roth accounts were born 20 years ago and are one of the best tools in financial planning if used properly.  Some of the benefits are obvious but others are not. You may know that Roth money is contributed after tax and grows tax free forever. But did you know that Roth accounts don’t have required minimum distributions like their traditional counterparts do?

Another huge benefit is that when you take distributions they are not counted as earned income which means your tax bill is not impacted. This can be huge in retirement especially when considering working part time while drawing Social Security.

What if you have all your money in traditional accounts? Can you get it into Roth accounts without paying taxes and take advantage of these benefits? There’s a good chance you can with a technique called “Roth conversions.” Roth conversions are when you money from traditional IRA accounts to Roth IRAs leveraging your lower tax brackets in lower earning years. The power of this process can be mind boggling if done right. Not only to protect your money now from taxes and required minimum distributions but also in the future for money you may want to leave heirs.

If you want to learn how using Roth conversions as a retirement planning tool can benefit you, schedule a strategy session with us to chat about it. It’s free and may be the best 45 minutes you ever spent working on your retirement. Go to to get started. Have a great holiday and let me know if you have further questions. -Jason

Is Renting A House Throwing Away Money? How Should I Save For A Down Payment While Renting?

 * I recently answered these questions for a young friend in the military and thought others may find the information useful. 

 ”Do you have any tips on saving for a house while paying for an apartment? Or is it better to go straight to a house? I feel like I’m throwing money away renting.”


This will be a bit long but I want to give you a solid answer because many people are in the same place.


First I don’t think rent is throwing money away depending on your situation. If I remember correctly you’re not in CA anymore but here, 100k of household income can still qualify you for low-income subsidies.


With the cost of housing being so high many people are taking housing payments up to 45% of their income. In this case, I definitely don’t think it’s a good idea. Housing should be no more than 35% of your after-tax income and I would love to see under 25%. 45% will make you house poor.


Renting can be great if you’re low on cash savings or simply don’t want to deal with the hassle. Buying can have big benefits as well but there are also higher costs. You have to pay for all repairs, taxes, and there are no guarantees it will go up in value. In fact, most home values barely keep up with inflation. You also need cash savings in case something breaks.


But long-term, owning typically wins.


The other challenge with buying is that if you’re young and have the potential to move a lot, the fees to sell and buy another house can add up and seriously hurt any gains you’ve made. And no you shouldn’t move out of state and keep the rental. 🤣


To answer your question about saving for a house while renting, if your goal is to own, this is how I would recommend approaching it.


Take your household income (for both spouses if married) after taxes, but not including any retirement contributions and figure out what about 25% of that number is. Then use this calculator


It will tell you the mortgage amount you can afford based on that payment.


Once you know that, if you can buy in your area then that’s great. Keep in mind you’ll need money for a down payment and also closing costs. There are many down payment assistance programs as well. But you will still need something saved because they usually make you pay some fees and/or have reserves.


So how do you save?


1. Create monthly budget.

2. See how much is left over.

3. Estimate how long you need to save to at least have 5% down of the property you want.

4. If it will take too long, get the cheapest rental you can stand and lower your costs short term until you can hit your goal.

5. If it will still take too long start a side business/get another higher paying job.

6. Also look for down payment assistance programs for first time buyers to help you hit your goal. There are many.


If you ever need more help I’m always here. For younger folks I’m happy to do one off coaching sessions to help you get started and get a basic plan in place.


 *hopefully if you stumble on this blog post while browsing the inter webs, it helps you out.