My family and I were going on a short vacation this summer. My daughter asked, “where are we going?” So, I told her the location and then she asked a few more questions. “How are we going to get there?” “What happens when we get there?” My personal favorite was “Do we have enough gas to get there?” Amazing how a 7 year-old’s mind is so geared towards the fundamental questions surrounding planning.
These are the very same questions and concerns that every business and individual have, whether it be concerning growth of a business, sustainability or retirement. Those simple questions posed by my daughter can be applied to any business or personal planning situation and are the core of any planning discussion.
- Where do you want to be at this time next year?
- What are your action steps to get to that place?
- What will it look like when you get there? Do you like the way it looks?
- What kind of capital do you need to achieve this goal?
Tax planning is an essential piece of this plan for businesses and individuals alike, to undertake each year in order to effectively plan ahead towards the end of the financial year to ensure that they keep as much of their money as possible.
We know that you all are busy running your successful businesses and do not need the stress of thinking about taxes. Being proactive and taking the opportunity to plan ahead is key in this whole exercise. Planning also assists with making those important business decisions whilst allowing clearer direction in how your business is heading towards the future.
Timing is key when it comes to tax planning. By your CPA reviewing your numbers and in turn your personal situation, it allows for certain opportunities and plans to be put into place to potentially reduce the burden of any amount of tax that is required to be paid. Our planning options become extremely limited once we pass December 31st.
Below are just a few key tips in getting the whole tax planning exercise right:
- Firstly, get your record keeping up to date and reconciled up to a specific date. Using cloud software such as QuickBooks Online is great for ensuring this is completed correctly and accurately.
- Reviewing your fixed asset listing to capture any obsolete items which can be written off and a tax deduction taken up. It also gives an opportunity to begin thinking of replacing some old assets with new ones.
- For individuals, Tax gain-loss harvesting is another form of tax planning or management relating to investments. It is helpful because it can use a portfolio’s losses to offset overall capital gains.
- Setting up and funding retirement plans for self-employed individuals is a key planning topic to discuss as well.
And of course, call your CPA to set up a time to discuss your financial position. With the new tax law taking affect January 1, 2018, there is a lot to discuss. Call us today to setup your year-end tax planning. (307) 265-4311.