Tax planning in December
Happy New Year! It’s time to get on my soap box again and preach to the business owners who will owe the IRS big for 2007. If you’re one of those who complain in the New Year that you owe too much in taxes, you only have yourselves to blame. You could have prevented a big tax bill if your books were organized and you had made a plan to reduce your taxes.
Your CPA or tax preparer can help you to make the choice from among the many options that are available to you. Action needs to be taken in December so that those tax-saving deductions can be implemented in the calendar year, January 1st is too late. Of course, you need good numbers to plan correctly, but if you do not make your move by December 31, you lose big.
My clients learned that lesson early on because I grew tired of listening to their complaints about large tax bills. I took action and turned a negative situation into a positive one, helping them to select from various legitimate tax deductions that would also benefit their business’ bottom line. They were very receptive to the new plan, which involved a review of their numbers and reconciliation of their accounts every month. They found that having a monthly or quarterly financial statement saved them both time and money by allowing them to see a clear financial picture and plan a tax strategy in advance. What a concept!
You can take action also by knowing where you stand at the end of every month or at least quarterly. If your books are organized it is so simple. It could even save you money on accounting bills! And now is the perfect time to start a new plan for the New Year.
So if you cannot stand the stress of paying a big tax bill every year, take control of the situation. Have you numbers all ready by November and make a plan. Then follow through before the end of the year, and you’ll be in control of your taxes, not the IRS.