It’s the 4th quarter. The holidays are right around the corner. The last thing you may want to think about is income taxes … but there are some compelling reasons why you should be thinking ahead.
Last year’s tax season saw the biggest change to the tax code in over 30 years. At the end of the tax season, we noted that one of the lessons learned was that individuals who engage us in tax planning early, on average, fared much better than those who did not. There are some very important reasons for this:
- Semper Paratus – Always be Prepared – it’s more than the Scout’s motto, it’s a way of life. This is also a great way to ensure you are in the best position possible to save on your income taxes. Taxpayers who get/keep their tax related documents in order are more likely to save money on their taxes. They are less likely to have missing receipts, documents and key information needed to ensure they take advantage of every deduction possible.
- Course Correction – If you are improperly positioned, early planning can allow you to make adjustments to improve your situation. For example, if you are over or under-withheld, engaging in planning now allows you to make adjustments while there is still enough time to make a difference.
- Allows for Proactivity – Depending on your situation, early tax planning may allow you to be more reactive and allow you to minimize your tax burden. For example, if your earnings have changed significantly from last year, the recommendations made by your tax preparer last year may not be optimal for your current situation. This is particularly true if you have experienced a windfall gain or had a significant change in your life (e.g. birth of a child, death of spouse, divestment or acquisition of a business, etc.) Additional time also allows you to think through your options, such as how to maximize your contribution to a retirement plan to improve your overall financial stability.
- Creates an opportunity to review overall financial/business health – One of the benefits of having a multi-disciplinary team at Zinner is it affords us the opportunities to address a broader array of challenges. If you are forecasting to earn less because your income is down, Zinner’s business advisors may be able to help you identify and address the issues affecting your business.
- Eliminate nasty surprises – If there is one thing you want to avoid when it comes to taxes, it’s a surprise. Early planning also alerts you to any potential unexpected tax liabilities. It also allows you to make adjustments to ensure that you have sufficient cash flow to cover tax payments.
Contact us today to schedule your tax planning session. Our team will walk you through the materials you will need to provide prior to your planning session.