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Start Tax Planning, Now!

submitted: Feb 28th 2008 | by: MargotBrandlin
Total views: 11 | Word Count: 447 | | |

It seems almost cruel to bring up the topic of taxes this far in advance of year-end, but now is the time of year when smart business owners are thinking ahead and making adjustments that will minimize the number of dollars that go into Uncle Sam's pocket on April 15.

Of course, taxes can get complicated. Hey, even Albert Einstein claimed, "The hardest thing to understand in the world is the income tax." And you've got more important things to do with your time. Make sure there's someone in your corner providing the advice you need.

Here are some things to ask yourself as you go throughout the year, so that taxes will be much simpler come tax time.

Do you have someone sitting down with you regularly to determine what the tax impact of your key decisions will be, including any major purchases you're going to make and the size of your paycheck?

The amount of money you can deduct for equipment purchases is higher than it has ever been. You can take expenditures that your company would otherwise need to capitalize-write off over several years-and get an immediate tax deduction. Depending on your tax bracket, you could see a tax break of $15,000 to $39,000.

Who's helping you develop a tax-savvy strategy for your year-end income and expenses?

At year's end, you should be thinking, "Increase expenses, and delay income." This means that you'll pay fewer taxes. For example, you can pay your January mortgage a little early or prepay for magazine subscriptions so that those taxes don't get paid until the next year. However, if you've had a bad year and expect the next year is going to be better, you might want to do the opposite.

You have someone educating you are about ways to save taxes that you might not know about?

Take care in check for those frequently missed deductions. For example, you could set up what's called af "Dependent Care Assistance Program." You can put more money in your employees' pockets this way. Every year, you can reimburse employees for up to $5,000 in childcare expenses, tax-free. They don't pay income taxes on the reimbursement, and you don't pay payroll taxes on that amount, either.

Your CPA still plays a vital role in preparing and filing your actual returns. But wouldn't it be reassuring to know that there was somebody who really understood your business and was working side-by-side with you throughout the year to develop a big picture tax strategy?

Take advantage of every legitimate tax deduction. It simply smart to do this, but you have to know what's best for your company in the long-term, and not just focus on what's going to reduce your taxes short term.

About the Author

About The Author: Margot Brandlin works in Minneapolis, Bookkeeping with Owl Bookkeeping and CFO. Bookkeeping in Minneapolis with OWl allows her to provide the highest caliber of service to her clients.

Article Source: Unique Financial Articles

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