Importance of Year-Round Tax Planning

Tax season is fast approaching, and you need to be prepared. 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.