As the days of February wane, the window for tax planning is quickly closing. For individuals and business owners alike, now is the critical time to ensure that all your strategies are in place to minimize your tax liability and maximize potential returns. Here’s a rundown of what you should be considering as the tax deadline approaches.
Tax Deductions and Credits Checklist
- Maximize Retirement Contributions – Have you contributed the maximum amount to your IRA or employer-sponsored retirement plan? Contributions can sometimes be made up until the tax filing deadline and may reduce your taxable income.
- Health Savings Account (HSA) Contributions – If you’re eligible, contributing to an HSA not only helps cover medical expenses but also reduces your taxable income. Verify if you’ve hit your limit for the year.
- Charitable Contributions – Charitable giving can boost your deductions. Ensure you have all the necessary documentation for any donations made and include any qualified charitable distributions from IRAs if you’re of age.
For Business Owners
- Business Expense Review – Go through your records to ensure all eligible expenses are accounted for. This includes office supplies, business travel, and any equipment purchases that may be subject to depreciation.
- Home Office Deductions – If you’re self-employed and working from home, consider whether you’re eligible for the home office deduction. This can include a portion of your housing costs, utilities, and internet service.
- Inventory Management – If you’re holding inventory, consider doing an assessment. Poorly managed inventory can lead to a higher taxable income due to overstocking or shrinkage.
Looking Ahead
- Adjust Your Withholdings – If you had a significant tax bill or refund last year, it might be time to adjust your tax withholdings. This ensures that you’re not giving the government an interest-free loan or facing a hefty payment come April.
- Organize Records – Ensure all your tax documents, receipts, and records are in order. Being organized can save you time and money when preparing your tax return.
- Consider Professional Advice – This might be the most beneficial time to seek professional advice. Tax laws are complex and constantly changing, and professional guidance can be invaluable.
- Be Mindful of Deadlines – April 15 isn’t just the deadline for filing your tax return; it’s also the deadline for actions like contributing to an IRA for the previous tax year.
- Plan for Payments – If you expect to owe taxes, start planning now for how you’ll make those payments. There are several options, but it’s essential to handle this before the deadline to avoid penalties and interest.
As we approach the final stretch before taxes are due, taking the time to ensure that all your ducks are in a row can lead to significant tax savings. Don’t let procrastination be the reason you pay more than necessary.
At Nepsis, we’re dedicated to helping you navigate the complexities of tax planning. Contact us today to schedule a last-minute review of your tax situation to ensure you’re on the right track.
Advisory Services offered through Nepsis, Inc.; An SEC Registered Investment Advisor.