Tax season is over, but it doesn’t mean that you don’t need to think about taxes until next
year. What you do throughout the year may affect your business’ tax liability next year.
Year-round tax planning can help reduce your tax burden or even possibly increase your
refund. Here are five simple things you can do:
- ORGANIZE YOUR TAX RECORDS: Create a system to keep track of important tax
documentation and other related information. This may help your tax provider find
overlooked or hidden deductions to help save you money.
- IDENTIFY YOUR FILING STATUS: Your filing status determines filing requirements, eligible credit deductions, and standard deductions, but changes throughout the year may make you applicable to more than one status.
- KNOW YOUR ADJUSTED GROSS INCOME: Your adjusted gross income (AGI)
determines the amount of taxes you pay. Prepared tax planning can help reduce your
AGI, reducing the amount you pay.
- CHECK YOUR WITHHOLDING: Federal taxes are paid throughout the year,
meaning it’s paid as you earn your income. It’s recommended to update your W-4
withholding form yearly according to your personal and financial situation.
- SAVE FOR RETIREMENT: Retirement savings can also help lower your AGI. A
traditional IRA plan allows you to save for your future retirement while lowering your
taxable income at the same time.
Hiring a professional to keep track of your taxes year-round can greatly benefit you and simplify
the process for you. Contact L.V. Browne, CPA for any of your accounting, tax, and advisory
questions and needs.
Work Cited: Year-round tax planning is for everyone, 7 June 2019,
https://www.irs.gov/pub/irs-utl/oc-tax-planning.pdf. Accessed 1 June 2022.