What is the difference between tax planning and tax preparation?

Tax preparation is the process of compiling and filing your tax return based on the financial activity that has already occurred. Tax planning is the proactive, strategic process of making decisions throughout the year — about income timing, deductions, entity structure, investments, and transactions — that minimize your tax liability before your return is ever filed. At Yeo & Yeo, tax preparation is the end product of a year-round planning relationship, not the entirety of the service. Our tax professionals engage with clients throughout the year to identify and implement strategies that reduce tax burden, improve cash flow, and align tax decisions with broader business and personal financial goals.