Health & Fitness
Tax Planning
It’s December, the heart of the festive holiday season. Thanksgiving and Chanukah have past, and Christmas and New Years are fast approaching. Many people are looking forward to holiday meals, getting together with family, and even squeezing in a vacation while the kids (if you have any) are on school vacation. The last thing on most people’s minds is taxes. But, for most individuals, and for calendar year C-Corporations, S-Corporations, Partnerships, LLC’s, and Trusts, December 31st is a very important date. It signifies the end of the tax year, which means by March 15th for Corporations and April 15th for everyone else, any taxes owed must be paid. You can file an extension, but the extension is for tax returns and not for amounts due.
Let me tell you a little about what we as CPA’s do. I’ll focus on Individuals, but much of what I say applies to the other entities. We prepare income tax returns for you. The returns we file are based on the information you as taxpayers provide to us. And that’s where frustration as a CPA sets in. I consider myself a trusted advisor, but if I only see you once in March for your tax appointment, I can’t really advise you.
We are still in the year 2013, and there are still 3+ weeks left in the current tax year. If you pull what tax information you have together, and give your tax preparer a call (or yourself if you file your own taxes), you can discuss what your situation is, and potentially make some moves that can help with your tax liability if needed. But if you wait until January 1, 2014 or beyond to make first contact, your tax preparer becomes nothing more than a historian. There are a variety of tax topics that, if planned properly, can have a positive impact on your tax liability.
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If you have nothing more than a W-2 and rent, there probably isn’t much that can be done. But if you have stock sales, itemize deductions, have a home-based business – now is the time. For the most part, your taxes are calculated on the cash basis, meaning a deduction for 2013 will only be valid if paid by December 31st.
I strongly suggest that you spend a little time in the next week or two analyzing your tax situation. If there are any items unresolved in your mind, now is the time to ask. By January 1st it will be too late.