15 Oct Year end tax planning tips
Start year end tax planning sooner than later
With the end of the tax year for 2020 fast approaching, it’s time to get your year-end tax planning in order. Whether you own a business or you file individual taxes, now is a good time to take stock and get your accounts in order, ready to complete your returns.
Even though it happens every year, it’s easy for your tax return to catch you off-guard. To help you get your planning started, here are some tips and advice to help with your year-end tax planning.
Make sure you’ve noted all of the key deadlines
When it comes to your tax planning, you need to make sure you’re familiar with all of the key deadlines you need to hit. Tax filing due dates can vary according to state, so make sure you have the correct deadline for your state.
Get your accounts in order
Your year-end tax planning means that you’ll need to get your accounts in order. It’s good sense to do this throughout the year, but if it’s too late for that, then you need to work through your accounts, gather receipts and make a start on your tax documents.
With a clearer view of your accounts, you can begin to work out your plan of action, making your tax planning more effective. With a number of online tools available to help you manage your business accounts, you can make it easier to enjoy simpler tax planning going forward.
Consider deferring income and accelerating your tax deductions
If your taxable income is likely to remain the same (or be lower) next year, you could consider deferring your income. Deferring tax will accelerate your deductions, benefiting your business. Some of the ways you can defer tax include:
- Delaying payments from clients
- Deferring bonuses
- Derring other types of income
Maximize your deductions
In addition to deferring your income, you can also maximize your deductions at this time. It’s the time of year when many businesses choose to upgrade equipment, make payments to suppliers and procure new services.
If there are things your business is going to need over the coming year, start buying them now to make the most of your deductions for this year.
If you’re filing as an individual, now would also be a good time to maximize your retirement contributions or set up a pension plan.
Consider your plans for the coming year
Analyzing your records over the past year can give you an opportunity to consider your performance in more detail and make adjustments and plans ready for the coming year. It’s a good opportunity for you to take stock and look at the areas you’re spending more closely – something that will help you ensure a more successful year next year.
Is it time to hire an accountant?
Your year-end tax planning is a lot of work, something that can take up a lot of your time if you run a small business or you’re self-employed. Hiring an accountant can be a smart move to make sure you hit all of your deadlines and provide the necessary financial information for your turn.
Poor financial planning is the downfall of many businesses, so having someone with the knowledge and experience of tax issues can help you. Not only will you be able to benefit from different deductions, but you’ll also know exactly where you stand with your finances. Not only that, but it’s going to save you a lot of stress and time.
You can hire an accountant to help you as a one-off with your year-end tax planning, or you can hire them on an ongoing basis to take care of your finances throughout the year. The latter option will make sure your accounting and record-keeping are always up to date, and you’ll benefit from expert advice too.
It’s important that you choose an accountant or accounting firm with expertise in your industry. This can help them understand more about your spending to provide the appropriate services and advice. With experienced, trustworthy accountants by your side, bookkeeping and tax preparation become much more straightforward for your business.
Let Dempsey Vantrease & Follis PLLC help with your tax preparations
If you need help with your year-end tax preparations, Dempsey Vantrease & Follis PLLC can step in. We have experience managing business and individual taxes for a range of clients, working from our Tennessee offices to provide various accounting services. With a team you can trust to do right by your accounts, it only takes a phone call to get started.
Find out more about our services by contacting us today.