As the days get shorter, the weather gets cooler, and the leaves start falling, we start to think of fall and winter. As a CPA, my thoughts turn to year end and of course, tax planning. But you may wonder, “Why should I do tax planning?”
Here are my top three reasons.
- To Plan — This is probably a no-brainer, but true. If we have an idea of what your taxable income is going to be, we can make plans for the year end. For instance, should you purchase that asset that you need before the end of 2017 or wait until January? What about the new vehicle that you have been considering? How would that affect your taxes? Should you pay off certain expenses before the year end, and what effect do these expenses have on the taxes? Should you change the type of entity you are or how your business is being taxed? These are questions that come up during the year, but they could have a more significant effect at year end.
- To Eliminate Surprises — It is much better to know now and prepare than to have a large tax liability spring up on you in March. Nothing is worse to me than to have to tell a client that they owe hundreds or thousands in taxes and they have no cash set aside since they had no idea of their tax situation. I also hate to be told about a transaction that a taxpayer has made that if we had known about it at the time, we could have mitigated the tax consequences.
- To Organize — This helps you to know exactly where you are with your business and your tax situation. From my experience, many business owners need to have a reason to get that information into their software and get prepared for year end. The tax planning session can be a reason to get on top of things. Not only is this good for tax planning, but it helps you at year end and helps you to better run your business.
So consider a tax planning session with your tax advisor and see if it can make your year end a little easier and eliminate any of those tax “surprises.”
A little more about us:
Located in West Des Moines, Iowa with a branch office in Winterset, Iowa, McGowen, Hurst, Clark & Smith, P.C. celebrates 65 years of extending excellent service to our clients, providing them with accounting, auditing, consulting and investment expertise.
Established in 1946, our staff has grown from 3 to 60 employees, making us large enough to provide our clients with a broad base of experience and resources, yet small enough to offer very personalized service—which we feel makes us stand apart from other CPA firms. In addition to the traditional services of Accounting, Tax Preparation, Audit and Business Consulting, MHC&S offers our clients specialized services including Estate Planning, Business Valuations, Cost Segregation Studies, Retirement Planning, QuickBooks Training, Financial Advisory Services, Fraud Detection and Deterrence, Business Succession Planning, Litigation Support and more.
MHC&S is a member of CPAmerica International, Inc., a national association of accounting firms offering membership to only 90 firms throughout the United States. This association offers a wide pool of additional technical expertise to the members firms, as well as continuing professional education necessary to maintain the degree of excellence which MHC&S feels is vital in today’s business environment.