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End of Year Tax Planning...nnLet's face it, people tell me all the time they want to save money on taxes. This typically means locking money up or spending it. I rarely find that clients really want to do that, let's explore why:nnWhen adopting a tax strategy, you have three levers that will move in concert:n- Wealth Buildingn- Cash Flown- Tax SavingsnnThis is counter-intuitive at first glance but to understand the relationship you have to stack strategies to see it, for instance:nnA taxpayer can purchase a vehicle to get a deduction, while this will increase the tax savings lever, it will decrease both cash flow and wealth building levers. This holds true unless the vehicle is a specialty vehicle that will retain/gain value over time or if the vehicle is used to produce income (Uber driving or rental via Turo).nnThe reality is that you can be in the highest tax bracket at 37% federal and you would still have to spend $100,000 to save $37,000 in taxes. But most people simply want to save money and ensure they only pay what they have to in taxes. In that respect, pay the $37k and keep $63k for investment opportunities.nnWhen does tax planning make sense? When you have a business or personal goal that can be achieved by leveraging specific tax codes that result in the government subsidizing your purchase or investment opportunity.nnTo win the game, you must be strategic...simply playing the game for a deduction is a race to the bottom.