Now’s The Time To Execute Year-End Planning Strategies

Year-End Tax Planning Strategies

As we quickly approach the end of the year, it is that time of the year where we give thanks for the past and begin our tax/financial planning for the future. At year-end 2017 and looking ahead to 2018, individuals and businesses need to incorporate traditional, as well as innovative, strategies into year-end planning.

As a reminder, Section 179 has been set as a permanent item, whereas bonus depreciation will phase out over the next few years. This has historically been a significant current tax benefit to many companies.

Prior to speaking with your accountant, we suggest the following reports be run (on an accrual basis and based off of your specific needs/accounting systems) and be provided to them in advance:

  • Balance sheet as of October 31, 2017.
  • Income statement, year to date to October 31, 2017.
  • Accounts receivable aging report as of October 31, 2017.
  • Projected billings/productivity for November and December 2017.
  • Projected gross profit for November and December 2017.
  • Projected overhead for November and December 2017.
  • Work in process schedule (open jobs at minimum) at October 31, 2017 and projected progress of work through December 31, 2017 (Construction companies only).
  • Review for any significant transactions that will/may occur in November/December that are not in normal operations (i.e., year-end bonus/adjustments, etc.).

In addition, you may want to review your:

  • Prior year personal tax return. You may have been provided estimated tax payments due for 2017. Confirm the payments were paid.
  • Personal items from last year to see if anything is substantially different (i.e., investment income, charitable gifts, interest, investment properties, etc.).
  • Investment allocations. With recent increases in the stock market, your allocations may be out of synch. If you have investments with losses, it may be worth a conversation with your investment advisor to harvest stock losses and/or realign.

You may also want to consider an appreciated-stock charitable donation to get the deduction benefit without the capital gains tax.

There are many benefits to effective year-end planning, including:

  • Assisting in your year-end cash flow needs.
  • Making timely adjustments you can control and/or reduction of your tax liability.
  • Reducing penalties and interest on tax payments due.
  • Reviewing salary, if applicable.

Without tax planning, you are simply guessing your tax liability come April 15 (or worse, later).

Now’s the time to make a plan.

If you would like to schedule a year-end planning session with us, please call to schedule a time that will work with your schedule.

Please do not wait until the last minute to make this appointment, as this process may uncover items that will need time to both review and appropriately put a course of action in place, while allowing you (or your team) enough time to execute prior to year-end.

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