4 Ways to Start Planning for the Next Tax Season Now

Planning ahead for the next tax season should begin with the new tax year on January 1st. It is best to determine how much tax you will be expected to pay and where you can make cuts to make those savings. When you are able to plan ahead, not only does it cut down the time in your preparations, the entire process will be less stressful.TaxSeasonCalendar

View Credits for the Upcoming Tax Year

It is important to be aware of the tax credits and deductions available for the upcoming tax year. This helps you plan which items you want to take advantage of such as home improvements or an environmentally friendly vehicle. Create a list of items you wish to take advantage of in the upcoming tax year.

Quarterly Assessments

Rather than waiting until you have all of your tax documents in your hand to file, do quarterly assessments with an accountant. Not only can this be adjusted as the year goes on, it gives you an idea of which tax bracket you will end up in. You will also determine your expected tax liability.

Plan Capital Losses and Gains Offsets

The best way to minimize your tax liabilities and prepare for the upcoming season is to offset capital gains and losses. It will actually save you money in the end. Plan these offsets with a financial adviser to ensure that they are done properly.

Begin a Savings Account

If you know that you will owe the IRS, start a savings account. Divide your expected liability by 52 weeks. Set this sum of money aside and put it into a savings account for the specific purpose of paying off your tax liability.

Final Word

These simple tips will help you get ready for upcoming tax seasons. Consider using a receipt scanning device to organize your receipts by category on your computer. This also helps with preparation.

Image credit: Anka Albrecht

About the author

Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

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