We’re halfway through 2016. What do you know about this year’s income tax obligation?
Your 2016 income taxes are probably not at the top of your mind in the middle of summer. After all, it seems like you just filed your 2015 taxes. Maybe you made your two estimated tax payments that have been due so far this year, but that’s as close as you’ve come to thinking about IRS forms and schedules.
The way we look at it, this is an ideal time to start your 2016 tax planning if you haven’t already done so. You’ve already recorded a solid six months of income and expenses, which is more than enough information to start getting a picture of where you stand with your income taxes.
Tax planning is another element of your overall financial planning. You can’t separate the two. Just as you work constantly toward keeping revenue ahead of expenses, you need to know how those sales and purchases will affect your income tax obligation.
There are times throughout the year when you’ll need to make a decision based in part on the outcome’s impact on your income taxes, such as major acquisitions of property, equipment, vehicles, technology, etc. should you purchase outright or consider renting or leasing? You should know ahead of time how you’ll be reporting these on your taxes. We can help with these decisions.
We suggest regular meetings with your accountant throughout the year to be sure you are ahead of the game when it comes time to file. That way, you avoid an unpleasant surprise. Instead, you’ll have a pretty good idea of where you stand before the IRS finalizes its forms and schedules in mid-January.
Income tax preparation can be complicated, frustrating, and time-consuming. Planning for it throughout the year will definitely lighten your load when it’s time to file.