Whether you file taxes as an individual, a business owner, corporation or both, the lazy, hazy days of Summer, barbecues and beaches should not distract you from the business of your taxes. Throughout the year, you take your car in to the mechanic for maintenance, visit your doctor to stay healthy, and get your teeth cleaned by the dentist – you should chat with your financial professionals mid-year to be sure you are not missing any individual or business opportunities to minimize your taxes by December 31st. A mid-year review of your tax return can reveal money saving ideas and gives you plenty of time to implement new financial plans.
Here are some events that can significantly impact your tax liability:
• Death of a spouse
• Change in employment; or spouse starting to work
• Substantial increases or decreases in income
• Large gains from the sale of assets, stocks or bonds
• Buying or selling a rental property
• Starting a business, acquisition or sale of a business
• Buying or selling or re-financing a domicile or vacation home
• Imminent retirement or reaching age 70 1/2
• Receiving a large financial gift or an inheritance
• Birth of a child or adoption
• Unplanned withdrawals from an IRA or pension plan
On your checklist of things to consider should be:
• What does your balance sheet look like? Is your business plan on budget, are you managing cash flow and expenses, are you feeling the impact of income gains or projecting losses?
• Starting a 401(k) or similar retirement plan like a SEP for your business, or enrolling in an IRA or 401(k) if you are an employee.
• Review withholding on your paycheck and estimated tax payments to avoid paying too much or too little. Two-income families and people with multiple jobs may be more vulnerable to being under-withheld or over-withheld.
• If your income is approaching the net investment income tax (NIIT) threshold consider strategies to defer earned income or shift some of your income-generating investments to tax-advantaged retirement accounts.
• If you are an employee that incurs job-related expenses that aren’t deductible for years through 2025, have you arranged with your employer to participate in an accountable reimbursement plan for these expenses?
• Have you considered bunching charitable contributions?
• Look at your family’s financial report card to see how you are doing based on your January 2019 goals – have you paid off debt, are you keeping within your budget, saving the percentage you had hoped?
CONTACT US: Don’t procrastinate! Life altering events and changes in circumstances can impact your taxes, don’t wait until tax time to see the results. With mid-year tax planning, you may be able to mitigate the tax impact of certain events and avoid unpleasant surprises before it is too late, as well as decrease your prepayments and obtain more cash flow. Call toll free to set up a consultation with one of our tax and financial professionals: 855-534-2727.
