A Dozen Tax Planning Triggers

Now is the tax planning season. Those that treat tax filing as an event and not a process often are the ones paying more than they need. So how do you go about moving from the event to planning? By looking at triggers that should stimulate a discussion. Here are some of the more common:​

1. You owed tax last year. Having a surprising tax bill is never fun. So if you owed taxes last year, project your current year obligation with a little planning if you have not already done so.

2. Your household income is over $150,000 single and $200,000 joint. As your income grows, so does your tax bill. This occurs because tax rates increase, and tax benefits phase out. This includes things like; lower child tax credit amounts, increases in capital gains tax rates, higher income tax rates, medicare surtaxes plus more.

3. You are getting married or divorced. The tax penalty for being married is higher than ever. Are you prepared? And if going through a divorce, not all assets are treated the same in the eyes of the IRS.

4. You have kids attending college in the next few years. There are a number of tax programs that can help, you may wish to review your options and their impact on your tax return.

5. You have a small business. There are depreciation benefits, qualified business deductions, and numerous small business tax credits to consider. A review is especially important if you have a business that is a flow through entity like Sub Chapter S, partnership or sole proprietor as these entities are taxed on your personal tax return..
6. You plan on selling investments. Capital Gains tax rates can now range from 0% to 37% (or even higher with the Net Investment Tax).

7. There are changes in your employer provided benefits. These changes could impact your taxable income this year. It is especially important if you are provided with high deductible insurance options.

8. You buy a home, sell one, or go through home foreclosure. There are great tax benefits within your home, but only if you know about them and plan accordingly.

9. You have major medical expenses. It is harder than ever to itemize deductions, but one way it's possible to itemize is if you have a major medical expense. When this happens it is time to review ALL itemized deductions to minimize your taxes.

10. You recently lost or changed jobs. Understanding the tax impact of unemployment benefits is crucial.

11. You have not conducted a tax withholding review. To avoid under withholding penalties, you need to ensure your withholdings are sufficient.

12. Your estate has not been reviewed in the past 12 months. Recently passed estate laws and potential changes in these rules make an annual review a must.
If any of these triggers apply to you, please schedule a tax planning appointment.


"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.  
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA;  Janice Papais, CPA