The summer is quickly winding down, and tax planning season is in full swing! Clients who want to achieve the results they anticipate in March and April are making tax planning a priority now. Proactive planning sets your business up for success and helps you keep your hard-earned money in your pocket.
The month of August provides a unique opportunity, allowing us for the first time all year to review 6 months’ worth of data. This allows us to highlight what went right in the first half of the year, what could be improved, and get an idea of the trajectory you’re on. Most importantly, it gives you the opportunity to avoid surprises during tax time.
Here are some things that we are doing for our clients to ensure they are prepared as we approach the fall.
1.) Making sure the books are cleaned up! – If you’ve fallen behind on your bookkeeping, now is the time to catch up. Once the books are fully cleaned up, we can begin preparing strategic business moves. Without clean books, planning for future tax liability becomes much more difficult! If you’re overwhelmed or behind, we can help!
2.) Implementing tax strategies – Once we have cleaned up books, we can sit down and begin implementing tax strategies.
- Did you buy property and does a cost segregation study make sense?
- Does the Augusta Rule apply to you? If so, utilizing this can lead to major savings.
- Do you have children who contribute to your business? Putting them on payroll can lead to huge reductions in tax liability and help set them up for a fruitful future.
- Does a Roth conversion make sense if income will be down this year?
These are just some of the few strategies we implement for clients to help put the ball back in their court!
3.) Reviewing equipment and capital expenditure needs – If you’ve been planning to buy equipment, doing so provides immediate tax benefits through accelerated depreciation. It’s important to make these types of decisions based off need rather than just for tax savings. Bonus depreciation and Section 179 can make a huge difference in tax planning.
4.) August is when proactive planning happens, not April – Discussing your entity structure and any major business decisions on the horizon. The most effective tax strategies are implemented and enacted year-round, not during tax preparation.
Now is the time to set aside some time for these conversations with your advisor!