Planning. Some of us love it, some of us hate it. One thing’s for certain, planning for your taxes equals more money in your pocket and less money owed. Year after year after year.
1. You can learn what will be accepted as a tax deduction BEFORE you buy it. Learn from your tax professional tips on what you can buy, for how much, and how many times you can use this deduction. Some things like cars and large assets are deducted differently. To get the most bang for your buck, it’s a smart idea to plan before purchasing.
Some people keep a “wish list” of items that can be deducted that would be beneficial to have in their business. If your tax liability gets a bit too high for your liking, then you can purchase something on this list and magically owe less in taxes.
2. You can plan for what you think you will owe. How often do we get sick with anxiety knowing that we will be faced with a huge tax bill because business was amazing this year? No more of that “I have to charge my credit card to pay down my tax balance with the IRS.” Plan for what your net income will be and start to put that money away and pay the IRS quarterly throughout the year. The result: more calm, clarity and less headache and stress during tax filing time.
3. You can maximize tax benefits available. I know someone who initially owed thousands to the IRS in taxes, but with her strategic tax planning, she was able to move money around and purchase certain investments for her business throughout the year. The IRS ended up owing her a REFUND after the various tax benefits she was able to claim.
To more money in our pockets!