They say luck favors the prepared. Well so does the tax code. In this video, I’ll show you 3 tax advantages you gain when you are proactive in your accounting.
Hi, I’m Marcus Mire, founder of MireGroup CPAs and the Total Control accounting system designed to help businesses profit through clarity and control in their accounting.
Good tax planning starts with a bird’s eye view. I recommend looking at the entire calendar year and making note of expected major expenses and projections of profitability. More specifically, work with one of our CPAs to mark key tax deadlines. You can start this at any time of the year.
Once you’ve got some context for what the year looks like, you can find tax advantages in these 3 areas.
1. Maximize Tax Deferred Contributions
There are a handful of tax-deferred options available to lower your personal taxes but they all come with different deadlines and maximum contribution requirements. Identify which contributions make sense for you, and then budget to contribute either routinely or at the end of the year depending on your cash flow or other priorities.
2. Salary Adjustments
Depending on how you structure your business you can reduce your tax liability on the money you take from your business. We advise our clients to start with the best legal structure, make adjustments to minimize their tax burden, and lastly keep it compliant with the IRS and state taxing authorities.
3 Smarter Spending
Not every dollar you spend provides the same tax benefit. Tax credits, depreciation, and income tax brackets are nuanced and change often. You can miss out when you don’t plan for them.
Last-minute expenses at the end of the year may lower your tax bill but it may not be the wisest way to invest in your business.
Tax planning is only one piece of a larger roadmap we’ve designed to bring businesses more time and profits through clarity and control in their accounting. Go to our website and download the free guide along with the self-assessment that shows you where to start.