For most people, tax season is like a college exam. They do nothing until the night before, then frantically scramble to study like they’re Garfield on a pizza hunt. Now, tax season can be a stressful time for many individuals and businesses. With so many forms to fill out, deadlines to meet, and regulations to follow, there are plenty of opportunities for your tax planning to go awry. That’s why we’ve started insisting on a strict year-round tax planning approach at MBS Accountancy.
What is year-round tax planning?
After consulting with clients throughout the years who were upset at overpaying taxes or under-receiving credits on their returns, we now realize it’s best to insist on clients being proactive and planning ahead. Year-round tax planning is an effective strategy that can set you up for success come tax season.
Year-round tax planning involves taking steps throughout the year to make your tax season easier and less stressful. This isn’t just about maximizing tax credits and deductions, though (although there is plenty of that). It can also include organizing tax documents and managing receipts better so they’re easier to retrieve during tax season. Or, you make quarterly payments so you avoid late penalties and underpayment charges. In any case, there are several benefits to thinking ahead when it comes to taxes.
How tax planning throughout the year makes your life easier
When it comes to taxes, the popular saying “better late than never” just doesn’t cut it. In today’s fast-paced world, where time is money, planning ahead for tax season is key. Why wait until the last minute when you can stay ahead of the game with year-round tax planning?
- Stay up to date on updates to tax laws: When laws like SECURE 2.0, CHIPS Act, or the TCJA are passed, it’s best to speak with your tax professional or accountant as soon as you can to see how it impacts your tax strategy. Having regular conversations with your tax professional can also help you stay on top of responding to IRS letters in a timely manner.
- Keep your tax documents organized: There’s nothing wrong with keeping receipts in a shoe box, but there are much better ways to keep them organized so you can save yourself the headache of tracking down your tax documents. Instead of waiting until the last minute to gather all your tax-related documents, you can keep them organized and up-to-date throughout the year. This can save you time and reduce the risk of errors or omissions on your tax return.
- Upgrade your tax season tech stack: Do you email your tax documents to your accountant? If you do, you’re leaving sensitive information open to hackers and phishing attacks. Instead, use a secure file-sharing system that is encrypted and only available to you and your accountant. For example, our firm uses Intuit Link to request and share files with clients. Tax season is too late to set up and transfer files into a secure solution. Take time throughout the year to discuss improving how you and your accountant share files.
- Seize tax opportunities: Year-round tax planning gives you time to identify relevant tax incentives and tax savings opportunities and develop a plan to maximize them for yourself or your business. By reviewing your finances and tax plan regularly, you can identify deductions and credits that you may have missed otherwise. This can help you reduce your tax liability and keep more of your hard-earned money.
- Adapt quickly to business or life changes: Did you recently get married? Sell a business? Acquire a business? When big events happen in your business or life, there’s a good chance they’ll impact your tax strategy. Instead of waiting until January to tell your tax professional, let them know within the year so they can advise you on any necessary adjustments to your tax plan.
Choose MBS Accountancy to ace every tax season!
At MBS Accountancy, we understand how stressful tax season can be. That’s why we offer year-round tax planning services to help our clients stay on top of their finances and minimize their tax liability. With our help, you can enjoy a stress-free tax season and focus on what really matters: growing your business and achieving your financial goals.
Year-round tax planning is a smart strategy that can help you stay organized, identify potential tax savings opportunities, and reduce the stress of tax season. If you’re looking for a stress-free tax season, contact us to develop a year-round tax planning strategy that works for you.