Tax planning is an important tool to help save money for you. Most of us have major life changes throughout the year that affect our tax situation. Maybe you have a baby, your child moves out or gets married, your child goes to college, you began a side business that has grown into more than a hobby, you work an extra job to help bring in extra money, you have other income items that put you into a higher tax bracket or you rent property. There are a number of things that can change in life and possible affect your tax situation. Tracking expenses for certain events will help support any deductions that you would be entitled to have on your tax return.
A couple of common missed deductions or deductions some people do not take are the following:
(2) Expenses used from personal money to support a new or stagnate business
(3) Pay to others for helping you with work
(4) Research and Development expenses
(5) Home office improvements
(6) Business related car expenses
(7) EIC credit for newly single parents
(8) Head of Household tax brackets for newly single parents
(9) Gifts to children
(10)Money invested from one of your businesses into another one of your businesses or even support of a new business.
And many, many more…..Each situation is different. Tax Planning involves a simple visit with an Accountant to see how your situation affects you. I would suggest a midyear checkup; if you did not make the inquiry beforehand. This checkup will prove what you should do to save money.
You find out from the checkup:
(1) If you need to have more money withheld from your check or
(2) Have less money taken out of your check
(3) How to invest extra money
(4) What receipts and payments to track
(5) How to plan growth for your business.
(6) How certain moves affect the amount of taxes
(7) How to find more pre-tax deductions
(8) How to give tax free gifts to others
(9) Learn what to report and what is not necessary to report to the IRS as income
(10)Attempt to avoid a huge tax bill for you or your family.
If you keep the steps above listed you can save your self-money when it comes to life’s changes. Tax Planning is worth the savings.