End of Year Tax Planning
Ernie Neve, CPA
November 6, 2019
By the time we get to April 2020, it’s going to be far too late to save anyone’s 2019 income taxes. At that point, we’ll just be recording history. And at my firm, that’s not what we like to do—we want to help you write the history that you want. That starts this month if it hasn’t already. How much time have you spent thinking about your 2019 income taxes?
Do you know what tax-saving decisions you are going to make between now and December 31? If you don’t today is the day to act. It’s really important to know where you stand, tax-wise. Many people assume they’ll be in the same situation as they were last year. There are two really big reasons why that’s a dangerous assumption.
First, if you had any major life changes in 2019, then your tax situation might not be the same as it was in 2018. Did you buy a home? Did you finally, pull the trigger on that vacation property you’d been saving for? Or maybe you invested in rental real estate. Maybe you had a baby or got married. Maybe you started a small business that utilizes a home office. Maybe you incurred a significant medical expense or some sort of casualty loss. Any of those will have an impact on your taxes—and you should know what that impact is ASAP. If you’re a small business owner, unless you’re depending on the holiday sales season to make or break 2019 you likely know how you did this year—and it might be very different from 2018.
Second, even if you think no significant change occurred, it doesn’t mean you should stop looking for new tax-saving options. Failing to implement the proper tax strategies before year-end is like throwing money away. It’s time to think about 2019 taxes, plan for 2020, and take full advantage of the tax strategies available to you. Planning ahead means not only potential savings come April, but it will also prepare you now so you can plan for the outcome. When it comes to taxes, no one likes surprises!
If all of this sounds overwhelming, take a deep breath. April isn’t here yet and there’s still a lot we can do together. I’m going to leave you with the words of Abraham Lincoln., who once said: “Give me six hours to chop down a tree and I will spend the first four sharpening the ax.”
Our job from now until January is to get that ax nice and sharp. It will make the job much easier. Call or mail our offices to set up your year-end tax planning meeting.