December is on its way, and in the blink of an eye, 2017 will be over – as will your opportunity to take advantage of last-minute tax deductions and savings for which your business may qualify. Fear not, if you aren’t a tax guru, we can help demystify your filing and may help you reduce your tax liability.
For some helpful tips, we sat down with Kristina Yarborough, Director of the Cain Watters’ Tax Department, to talk tax-preparation and year-end planning to meet your financial goals. For many, end of the year tax planning is stressful at best and downright impossible at worst. Luckily, Yarborough provides some helpful insights to make the process less cumbersome.
While waiting until 2018 to tackle your taxes is tempting, this could ultimately result in lost opportunity for savings. Yarborough suggests maintaining awareness of what you will owe and what savings or deductions may exist for your practice. It is also important to know how and when to meet the requirements well before it comes time to file, as many deductions must be taken advantage of before the year end.
If you are working with a financial planner, check to see that you’ve hit the goals you set at the beginning of the year, and discuss the best timing for your large equipment purchases. If you’ve had a successful year, buying a new X-ray machine before Dec. 31 may provide a nice write-off opportunity to reduce taxes. If your year was a bit leaner than expected, have your financial planning team examine your expenses for anything that could be deemed a charitable donation.
By taking a look now, you still have time to make adjustments, and your planner can give you the best advice on how to do so.
A few recommendations
As the year winds down, there is still plenty of time to make the most of the year regarding your tax liability. Consider the following tips before wrapping up 2017
1. Make sure your 401(k) deferrals are on target to meet the maximum limit for the year.
2. If you have business expenses purchased with your personal credit card, don’t forget to reimburse yourself.
3. Talk to your financial planner about your traditional and Roth IRA contributions.
4. Contribute to your HSA – Make sure to take full advantage of this non-taxed savings by contributing the maximum amount before Dec. 31. If not, you have until April 15, 2018, to fully fund your prior year HSA.
5. If you were affected by a natural disaster, inquire about tax credits with your financial planner.
A year unlike the rest
2017 was a rough year for a lot of Americans. Massive natural disasters wreaked havoc across the United States and their effects could have an impact on your filing.
If you’re a practice that was affected by a catastrophe, Yarborough stresses the importance of keeping receipts from all repair expenses, insurance claims and payroll documents. If your practice was closed or damaged, and you continued to pay employees, you could be eligible for specific tax breaks.
Saving receipts is common sense to most, but another thing to remember is natural disasters can happen without notice. Utilizing an electronic method for storage is safer, and allows you to share documents easily with your financial planner, who can work with you to discover any savings for which you qualify.
What to expect in 2018
We didn’t see too many tax changes in 2017. However, with a new president comes new tax adjustments, and we expect to see those begin in 2018. Among the anticipated changes are a lowered corporate tax rate, which could be great news for practices.
Changes to standard deductions and itemized deductions are likely on the horizon, as well as charitable donations. Before the end of the year, we strongly recommend discussing a strategy for these new implementations and what purchases you might want to make before Dec. 31 to ensure you take full advantage of tax incentives now and next year.
Let us help
We’d never try to perform a root canal. That’s your specialty. Ours is strategic financial planning and proactive tax planning and preparation.
When working with a Cain Watters financial planner, you have peace of mind that we’ll work to ensure you save as much money as possible. “We don’t just file a tax return. We deep dive into their taxes to find every opportunity for savings,” says Yarborough.
Working with a financial planner throughout the year helps you set goals and stay on track. Yarborough notes the importance of reflection, “at the end of the year, we’ll walk through our beginning of the year plan to see what targets we hit and which we can continue working on into the next year.”
Taxes don’t have to be a burden. At CWA, our focus is on-going strategic tax planning. We’ll take the stress of filing off your plate, and you can focus on the work you do best.