"Fall" into Tax Savings for the next year!
by Joe Harding, CPA
With fall now here in Arizona, most of us can breathe a sigh of relief from the scorching heat of summer and actually enjoy outdoor activities. It’s also a reminder of why we bear only three awful months out of the year. If we are on top of things, it’s also a time to start planning holiday parties and looking forward to seeing family. However, don’t let the pleasant change in season distract you from tax planning.
There are so many things in the tax code that have time limitations. It’s really time to check in with yourself if you want to actually participate in your bill with the IRS. Taxes can be very much within people’s control, even though they don’t feel that way. If you’re still out on extension, heads up — you have less than four weeks so it’s time to finish whatever you have been putting off, and get that stuff into a tax office.
Some people might say “Well, I have until October 15th”. Remember, October 15th is the final filing day for personal returns, so October 13th is the last day you should attempt to e-file, in case there are problems. And that means you probably should have your things reviewed by the 10th.
If you’re planning on funding any business related retirement accounts — SEPs, Keogh Plans, anything other than an IRA — those documents have to be in place very, very soon. You don’t have until April 15th of 2017 to do anything other than fund personal IRAs. If you’ve been thinking about setting up an account for your business that you can fund with much more than an IRA contribution, the paperwork has to be done and in soon, and the funding often has to happen before the end of the year!
Also, there is the overall common sense that if you do a pro-forma return based on nine months’ income, you can now start to look at just how much tax you may owe by the end of the year, with time to make adjustments. Like start shopping for equipment for your business that you can fully deduct, or other proactive business purchases. Problem is if you don’t know you need to make the adjustments, then how are you going to make them with confidence and with time to think about what you’re about to do?
At our firm, we like to do pro-forma returns on everybody before October 31st. Put the numbers in to the tax software based on what you know about yourself up to now. It’s not hard to do those. As to missing tax documents that come in the mail, we can call the HR department, call the bank, call the broker, and get an up to date set of numbers very easily, plug them into the pro-forma tax return, and take a look at the damage. Then we’ve got time to think about repairs, discuss options. You have time to think and then do something that will help you with your tax burden, rather than just waiting until next year and seeing what happens.
Call us and set an appointment to come in. Let’s talk about any or all tax planning items, and be proactive this year, instead of simply full of regret in April.