FIN1 FTU - Stage 8

F1 – Project-Stage 8: Filing and Managing Income Taxes TCHE322 Lawrence et al (2011). Chapter 3 CFA Level 3, Volume 4 CFP Handbook (2015). Chapter 45 Law on personal income tax of Vietnam, 2007 and relevant regulations 1 Personal finance planning Personal finance planning process 1. Define financial goals. 2. Develop financial plans and strategies to achieve goals. 3. Implement financial plans and strategies. 4. Periodically develop and implement budgets to monitor and control process toward goals. 5. Use financial statement to evaluate results of plans and budgets, taking corrective action as required. 6. Redefine goals and revise plans and strategies as personal circumstances change. Essential Information of personal financial plans * 1. A summary of the goals 2. Significant assumptions and justification Tax 3. Estimates 4. Recommendations • • • • • Asset acquisition Liability and insurance Savings and investment Employee benefit Retirement and estate 5. A description of limitations on the work performed 6. The recommendations in the engagement should contain qualifications to the recommendations if the effects of certain planning areas on the client’s overall financial picture were not considered. * Adapted from Paragraph .35, Statement on Standards in Personal Financial Planning Services No. 1 3 Schedule of lectures Project topic covered • Taxation planning and Income tax • Tax filing Groupwork project activities • Identify your income tax • Tax calculation • Expected outcome: Taxation planning 4 Tax planning The end goal of tax planning for financial planners is maximizing the client’s after‐tax wealth. Understanding taxation system and our taxes Tax avoidance and tax evasion* 5 General principles of taxation Taxation of the components of return: • Income tax. • Gains tax. • Wealth or property tax. • Stamp duties • Wealth transfer tax The tax status of the account • Taxable account • Tax-deferred account • Tax-exempt account 6