Many people don’t think about their taxes until April arrives and it’s time to file. But by that point, the year is already behind you—along with many of the opportunities that could have meaningfully influenced your tax outcome. 

That’s the difference between tax preparation and tax planning. Understanding that gap can reshape how you approach your finances, not just at filing time, but throughout the entire year.

What Is Tax Preparation?

Tax preparation is the process that happens after the year has ended. You gather your W‑2s, 1099s, receipts, and other documents, and your CPA uses them to calculate what you owe—or what you may be refunded—and then files your return.

It’s a necessary step, but it’s also completely backward‑looking. You’re simply documenting what already took place. By the time you’re filling out those forms, the choices you made (or didn’t make) are already locked in. For many people, this is the only moment taxes enter the conversation.

What Tax Planning Does Differently

Tax planning, on the other hand, happens throughout the year. It’s proactive and forward‑focused. Instead of asking, “What do I owe based on last year?” it asks, “What steps can we take right now to improve next year’s tax outcome?”

Strategic moves like Roth conversions, charitable giving strategies, and retirement account withdrawals have a deadline of December 31—not April 15. By the time you sit down to file in the spring, many of the most valuable opportunities may already be gone. 

Waiting until filing season to think about taxes is a bit like checking your rearview mirror to decide where to turn, when the turn has already happened.

Where a Financial Advisor Fits In

When it comes to taxes, financial advisors and CPAs play very different—but equally important roles. They’re not meant to do the same job.

A CPA focuses on compliance: ensuring your return is accurate, properly filed, and aligned with IRS requirements. Their work is essential for documenting what has already happened.

A financial advisor, on the other hand, focuses on strategy. We look ahead to identify what’s coming and explore what actions could help improve your future tax outcomes. That may include planning the timing of retirement account withdrawals, evaluating whether a Roth conversion makes sense in a given year, or coordinating charitable giving with your broader financial goals.

Together, a CPA and a financial advisor can provide a complete picture—covering both the rearview mirror and the road ahead.

Reframing How You Think About Taxes

Taxes don't have to be something you address once a year and forget about. For individuals with more complex financial lives — especially those approaching or already in retirement — taxes touch almost every major decision: when to take Social Security, how to draw down retirement accounts, whether or when to sell appreciated assets.

These decisions aren't made in April. They happen throughout the year.

Having proactive conversations about tax planning — not only tax preparation — is one way to help ensure you're not ignoring important decisions simply because the timing didn't line up.

Schedule a conversation with our advisors today and start planning proactively, not reactively.

This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information