Tax Planning Now Can Save You Money Later

 When we review past tax returns of new clients, we usually find they paid more taxes than they needed to. The primary reason is failure to adequately tax plan.
What Is Tax Planning?
Tax planning is the process of gaining the latest tax information and taking the necessary actions to delay or avoid paying unnecessary taxes. Effective tax planning will enable you to take full advantage of tax law provisions, effectively use tax credits and deductions, and apply tax breaks.
When Should You Tax Plan?
Unlike preparing your tax return, you can work on tax planning throughout the year. If you can create time now, start planning for tax year 2020. At the very least, you should begin planning immediately after filing your 2019 return.
What Actions Should You Take?
If you are employed, you should check your paycheck withholding to ensure you are deducting enough from each paycheck. Last year the consequences of the Tax Cuts & Jobs Act caused many to under withhold and either receive a smaller refund than expected or owe money.
You should also consider maximizing your contributions to your 401 (k) plan, and take advantage of tax exclusions, such as gifts to dependents.
As a small business owner, you should have a system in place to keep accurate track of deductible expenses, plan and create the most effective strategy for write-offs, prepare carefully for estimated quarterly tax payments, and make sure you maintain compliance with the most recent IRS guidelines.
We also recommend that you discuss your tax planning with your tax preparer. If you are a client of ours, you are welcome to receive unlimited free tax planning advice from us.
Professional Tax Services is a locally owned provider serving over 3,500 local residents and businesses. For more information call 661-259-1967 or visit www.scvprotaxservices.com. Through their complimentary EZ2 Thrive program, they provide unlimited free tax planning advice to their clients.