February 22, 2017
It may feel as if there is never a good time to start thinking about your taxes; they can be complicated, time consuming and stressful. But leaving them to the last minute is never a good idea, especially if you have a high income, itemized deductions, are self-employed or own a business.
Even if it’s many months until the IRS begin accepting income tax returns, it still may be a sensible time to start reviewing your income and expenses. Not only because it will save any panic as the due date approaches, but there are often tax minimizing strategies that you can take advantage of; waiting until the last minute could mean that you run out of time and money. Below are a couple of reasons why it makes good sense to start planning for your taxes sooner, rather than later:
It will allow you ample time to make any necessary changes, both as an individual or as a business owner:
If you begin planning your taxes well in advance, it means that there will be plenty of time for a tax professional to step in and recommend any changes that you might need to make. Expecting an accountant to be able to rescue you at the last minute, simply means that you may lose out, and you’ll end up paying them for help that you haven’t allowed them enough time to give you.
Maximizing deductions cannot be done at the last minute, and the relevant information must be with the IRS before December 31st to be included on the tax return for the following year. As a tax payer, you may find that you’re able to fund a health savings account, sell stocks at a loss or even make additional charitable donations, but these options will be minimized after the 1st January.
Other tax strategies may also come into play, but all will need to be considered and recorded before the end of the year.
You’ll be able to avoid any unpleasant tax related surprises:
Taking a proactive approach to tax planning is highly recommended by all tax professionals, and most agree that clients should plan to meet with their CPA’s in the fourth quarter. Once this meeting has taken place, the tax payer should have a much clearer idea of how their year will end financially, and there should be no unpleasant, costly surprises.
Getting your taxes prepped and planned in plenty of time, also prevents you from incurring any penalties for late filing, some of which can be costly.
If you think that taxes are stressful, remember that things could get a whole lot more stressful the longer you delay planning and preparing them!So, when it comes to preparing your taxes, don’t procrastinate and leave everything to the last minute, hire a tax professional with plenty of time to spare, and get your taxes shipshape to minimize stress and maximize your deductions.
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