By Warren A. Sidosky, CMA | August 28, 2015 | warrensidosky@gmail.com
After tax season, it’s tempting to close your eyes to anything that has to do with taxes until next year. Don’t wait. Being proactive now will ensure that next tax season doesn’t catch you by surprise.
· Have a designated place where you and your family keep tax records and important documents organized and safe. Searching for misplaced files and records can be stressful and can make next tax season difficult. Be sure to keep these records, such as last year’s tax return, safe and accessible.
· Look back at your income tax return. What caught you off-guard or was unexpected? What items helped you reduce your tax bill? Some of these items may no longer be available to you. For example, education credits if your child graduated. We can discuss other ways to balance this future loss.
· Keep track of things such as charitable contributions, job related expenses (those not reimbursed by your employer), and eligible medical expenses. You may be able to lower your taxes if you take the itemized deduction route rather than taking the standard deduction. Itemizing may mean a larger deduction, but you must maintain accurate records.
· You can’t always predict the future, but you can plan for it. Will your income tax situation change? For example, starting a family, a new job, buying a home, or entering retirement will impact your tax liability. Some life changes require you to take action, such as adjusting the amount withheld from your pay or retirement distributions. Let me help you stay aware of how these changes can affect your taxes.
· For business owners, keep track of everything for your business, even the expenses that seem "too frivolous" to count. Many business owners misunderstand the importance and value of tracking all their expenses. When you think of top tax deductions, what first comes to mind? Automobile expenses and/or mileage? Payroll? Company supplies? All pretty obvious - but what is less obvious is expenses related to things like hotel stays, fine dining, and convention or conference attendance. If directly related or directly associated to your trade or business, that's enough to establish that it was for business purposes. You can deduct all of your travel expenses, including the costs of getting to and from your business destination and any business-related expenses at your business destination. However, there are certain rules that apply when business owners extend their stay or combine personal activities with business ones, so keep, and make notes on, all your receipts so that you can easily allocate the expenses to the proper activity. If you have a question about whether or not an expense is deductible, call or e-mail me. I can help you to stay current on the tax code while you focus on doing what you do best - running your business.
· Nothing is worse than being unaware of tax issues that can directly affect you. The tax code is complex and ever-changing. By keeping me up to date on changes in your life that may affect your income tax situation, together we can prepare for, or prevent, any surprises for next year.
About the Author
Warren is a trustworthy business partner, Finance and Operations Expert, Certified Management Accountant and Six Sigma Yellow Belt with over thirty years of experience in the retail/wholesale, fashion, consumer products and distribution industries. He is presently Financial Services Consultant at Warren A. Sidosky, CMA, providing advanced accounting and tax services, financial system implementation, business planning, modeling and forecasting to start-up and established businesses over a wide range of industries. He delivers innovative solutions to complex problems.
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