Newsletter Tax Planning

 

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Some helpful insight - A monthly newsletter form Robert Reinert Consulting

Tax Planning

Why is tax planning in August important?

Time and Timing: 

 

Time:

You have five months to organize and plan what you are going to need to do to save taxes and avoid penalties when you establish your tax strategies in August.

 

Timing:

August is not that far from the last year's filing deadline. This makes it a bit easier to recall what you did last year, some of the things you may need to improve on to gain additional deductions, or things you can avoid doing to eliminate penalties this year.

Also, if you have a business, seven months of activity have past and those results provide a good picture of what the year may look like in terms of revenue and expenses.

 

Tax planning is as important as tax filing!

Tax filings are the final result of what you did in terms of taxable revenue and deductible expenses. Simply sorting out what you did and filing it with the government is a losing approach to the tax saving process. In this case you are trying to dig up items that are deductible with the intent of lowering your tax liability instead of knowing before hand what you will file and having it already organized.

 

The winning approach is planning what the year will look like before it is over!

 

Having everything organized to prepare those returns with your CPA. He is an expert on helping you make that plan and laying out the strategy for the lowest possible tax liability. You shouldn't wait to schedule your appointment with your CPA and make this a winning year for tax savings. Your CPA can also point you in a direction that will help you build wealth and secure your financial future with recommendations about other financial matters outside of preparation guidance.

 

What are some of the problems encountered from not doing tax planning?

When your CPA prepares your tax return he may also prepare a W-4 form for your payroll department that tells them how many allowances they should use to calculate the correct amount of federal withholding taxes. This information is based on what had occurred in the prior year, not the current year, with some expected changes. This is only an estimate early in the year and could be dramatically different as the year moves forward. The payroll department may not properly withhold when there is special compensation arrangements, such as bonuses or incentive pay. This needs to be reviewed before the year is over and with enough time to make sure that you are not coming up short with your withholding causing a large tax liability.

Prepared by: Robert Reinert, CPA

Visit our website to contact us today so we can prepare a budget for you or your business! Visit our Website https://www.rreinert.net/

 

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