Holiday time is over!

The time for spending has finished! It is time to pay those holiday bills.

Maybe you’re thinking your income tax refund will help? In some ways, it can.

After all, who isn’t going to need a higher tax refund? Okay, cool. Did you tax plan? Tax plan? What’s that?

What is tax planning? No, it is not tax preparation. That can take anywhere from 15 minutes to six hours, based on the preparation of the worksheets and schedules. Tax planning is much more comprehensive.

I like to say that the difference between tax preparation and planning is like baking a cake. Tax planning is getting all the ingredients or receipts and put them in their proper places, while tax preparation goes from mixing all the ingredients to popping the cake mix into the oven and letting it bake. Like anyone who bakes or cooks knows, getting all the “right” ingredients take time but the cake will surely taste better!

Do you know which tax rates and breaks were made permanent in the last 12 months? Did you keep copies of your receipts regarding medical expenses or gifts to charity? Did you get robbed and get a police report? Do you own a home business in your home? Do you know how much mileage you use to and from work?

What does this all mean? Tax planning is as essential as ever.

Tax planning, in its purest form, should provide an overview of key tax provisions that you need to be aware of and offer you a wide variety of strategies for minimizing your taxes. But there isn’t enough space to touch on all of the available tax-saving opportunities.

Now, is the time, to sit down with a tax or financial advisor and let him take you through a “tax overview” of your life and lifestyle habits. After a thorough examination, he or she should be able to prescribe a “checklist of deduction and credits” you could be eligible for, or more importantly, should be incorporating into your lifestyle already — you’re just not receiving the tax benefit. Remember, we get taxed on net income, not gross income!

What’s the difference? The subtraction of tax deductions and credits brings you to your net income — on which our taxes are assessed.

The lower your net income, the lower your tax rate. In theory, the lower your tax rate, the higher your tax refund will be. Want to pay your holiday bills with your tax refund? Forget tax preparation; learn tax planning now!

Anthony Rivieccio is the founder & the CEO of The Financial Advisors Group, celebrating their 20th year as a fee only financial planning firm specializing in solving one’s financial problems. Anthony, a recognized financial expert since 1986, has been featured by many national and local media including: Klipingers Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Channel 67 TV, The Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Bronx News and The Bronx Chronicle. For financial inquiries, assistance or a FREE 2016 TAX PREPARATION BROCHURE, contact the firm or Anthony at(347) 575-5045 or a_rivieccio@yahoo.com