Tax filing deadlines may be months away, but all of your tax decisions should be made by December 31. With the end of the year fast approaching, you should plan your tax strategy now, before it’s too late.
- Preparing to File. It’s not too early to begin preparations. Consulting your tax attorney now will help you determine the proper tax treatment of the various events that occurred in your business during the year. There may still be time to rectify any mistakes before they must be reported to the IRS. Also, your attorney can review your prior returns to determine better filing positions to take as well as possible refund claims.
- Other Filing Requirements. It’s a good idea to review your other filing requirements for the year to ensure full compliance. Businesses should review their estimated tax filings, requirements to provide Form 1099 to others and any other miscellaneous filing requirements that may need to be met.
- Year-End Strategies. Your business may have certain transactions which it will close on at the end of the year; consult your tax attorney to maximize savings and minimize the tax bill associated with them. Working with your tax attorney, you can attempt to postpone income until 2018 and accelerate deductions into 2017 to lower your 2017 tax bill in anticipation of tax reforms.
- Preparing for Next Year. The next tax year begins January 1 (unless you have a different fiscal year). If you’ve noticed problems in the last year or have structural changes to your business, it’s best to get everything in order before the next tax year begins. Consulting with your tax attorney will help you optimize the structure of your business and its transaction for tax purposes in the next year. Waiting until the next year begins may be too late to effectively achieve your goals.
- Tax Reform. Federal and state governments are contemplating tax reform measures for various reasons and with varying effects on businesses. It would behoove any taxpayer to contact their tax attorney to determine what changes in the tax laws occurred in the last year or will occur in the coming months that may affect their business or personal taxes. Even if no major overhauls occur, every taxpayer should consult a professional to ensure there are no changes that affect their tax position this year or in future years.
There are numerous reasons why you may want to consult your tax attorney throughout the year, but some decisions wait until the last minute, whether intentionally or not. Be proactive and meet with your tax professionals before the year ends to make any corrective measures. It’s better to make your own plans rather than waiting for the Internal Revenue Service and the Department of Revenue make plans for you.
Contact a member of SKO’s Tax practice for assistance with your year-end planning.