December has a way of making tax planning feel urgent—but by December, you’re already behind the strategy and some of the best planning opportunities could have already passed you.
A year-end tax bill shouldn’t be something you’re shocked at or that you discover after the books are closed. It should be something you’ve been watching, estimating, and preparing for throughout the year. Afterall, if you’re not paying attention to your numbers, are you really paying attention?
Waiting until December is not going to avoid any surprises. Tax planning is extremely important, and much different than tax preparation. Preparation is dealing with that already happened and telling you the final bill. Planning helps you make informed decisions for the bill you are expecting while there is still time to do so.
Before year-end, at a minimum all business owners should consider whether income is tracking higher or lower than expected, review outstanding receivables and expenses, assess planned equipment purchases, consider reasonable owner compensation, and make sure there aren’t unexpected transactions that could significantly affect their tax position. Those details help us determine further tax savings strategies that can save you money now, or in the future as well.
Sometimes the best decision is to take an available tax-saving opportunity. Other times, keeping cash in the business, paying down debt, investing for growth, or simply preserving liquidity may be the better choice. Having real and deep conversations about your business is one of the many services we love to offer!
The goal isn’t to eliminate tax at all costs, that is almost impossible in most circumstances. It is, however, to avoid surprises and make decisions with the full picture in front of you instead of reacting to the tax bill and wishing you would have done differently.
Before December 31 arrives, talk to us. A few conversations now can make a significant difference in how you finish the year and how you start the next one..
