Hi, I am Bette Hochberger, CPA, CGMA, and today I’m going to tell you what tax planning is and why you need to implement tax planning strategies if you want to save money on your taxes. The truth is when a client comes to me at the end of the year and has not done any tax planning; there is very little that I can do to help them save money. To avoid this situation, I recommend tax planning to all my clients.
So, what is tax planning? Tax planning can be technical and confusing, so I like to do the heavy computing off-screen and instead present the client with a tax planning report that includes strategies. The tax planning report breaks down what you will likely owe at the end of the year based on the information you provide, along with any deductions and credits you plan to take. The report will then tell you how you could save more money and give you ideas on how to qualify for other credits and deductions.
The tax planning report I use will offer three strategies and strategy details. An example of a tax strategy is the Section 179 Expense. Section 179 expense allows you to decrease taxable income by writing off the value of business assets all at once. Several purchases qualify for the deduction; some of the most common are large office machines, tools and equipment, computer software, and office furniture. You likely have many items you have purchased for your business regardless, so this tax planning strategy will help you save so much money in taxes. The coolest part about this deduction is that even if you finance the cost of the items, you can take the deduction now.
That is just one of the many tax planning strategies we use to help our clients save money on taxes. So, if you want to save more money come tax time, set up a tax planning meeting now! Please don’t wait, or it will be too late. Thanks for sticking around; we will see you next time!