With tax season behind us, it’s tempting to banish any tax-related thoughts until next spring. However, resisting those urges can significantly ease your burden. Alleviate your tax season stress by replacing procrastination with PLANNING.
Store your tax documents together, either physically or electronically. This is not limited to the year-end tax forms. Be sure to store all tax related documents, such as settlement sheets, charitable contribution confirmations, etc. For businesses, keep your books and records reconciled each and every month.
Adjust Your Withholdings and Estimates
Use this year’s tax returns to help you make better decisions for next tax season. If you under-withheld or underpaid estimated taxes in 2016, you should adjust your 2017 withholdings and estimates to avoid possible penalties next year.
Evaluate Your Retirement Plan
When evaluating your retirement plan, think to yourself, “How much can I, how much should I, and how much do I need to contribute this year?” Checking this information annually is critical. IRA contributions can be made up until the filing deadline in April, while 401(k) contributions must be made by Dec. 31, while, for businesses, Simplified Employee Pension Plans can be setup and funded up to 10 months after year end, if the related tax return is extended. More complex business plans require implementation well in advance of year-end.
See Your Tax Professional in the Fall
Having piece of mind is invaluable when we think about mitigating tax liabilities and tax season stress. Large refunds are often frustrating because of the missed opportunity and lost use of those monies during the year. Likewise, the surprise of a large balance due is never pleasant. You can project your tax liability so that the ultimate tax filing results are no surprise. Meet with your tax advisor in the fall to engage in proactive tax projection and planning. I95
A partner of Naden/Lean LLC, Bruce Caulk provides professional services to businesses in numerous industries. Bruce maintains direct and consistent involvement with his clients, which allows for complete accessibility to discuss and advise on matters of importance.