Tax planning should be one of the main roads taken, not just a quick detour, when following a successful financial roadmap. Businesses and individuals alike should be able to save money and maximize cash flow with a little advanced tax planning. Recently, a few of our office Tax Department Heads offered some additional insight on the importance of timely tax planning:
Tax planning can be used as a way to postpone or re-direct taxable events. By employing effective tax planning strategies, there will be more money to save and invest, or more money to spend. Tax deductions and tax credits can be created, accelerated or increased by the proper utilization of applicable tax breaks available under the Internal Revenue Code.
Lauren Bashista, Northern Nevada Tax Department Head
It appears the traditional tax planning strategy of accelerating deductions into 2017 and deferring income until 2018 will be prudent this year. This is true whether or not tax reform legislation is passed before the end of 2017. Presumably tax rates for most people will go down if in fact legislation is passed. So the deductions will be worth more this year than next. It may take some analysis to determine the benefit of making a state income tax payment prior to December 31 due to Alternative Minimum Tax issues which are still in play.
Tom Froehle, Colorado Tax Department Head
Despite the uncertainty surrounding the possibility for tax reform and legislative changes, tax planning is more important than ever. Tax planning should be part of a broad multi-year analysis of business operations, cash flow, budgets/projections, and industry outlooks, which should also include planning for potential business disruptions, to ensure appropriate tax strategies are implemented to support long-term goals. Generally, tax planning is slated on the “To Do List” for November or December but starting earlier may save time and money.
Heather Thielges, Mankato Tax Department Head
Tax planning is also an important tool for business owners to use when developing business plans and reviewing financial results, before making any final financial decisions.
Additional considerations during tax planning include:
Contact your Eide Bailly professional or a member of our tax department to start tax planning for increased cash flow and your financial success.