Think you can wait until December 31st to do tax planning for 2016? Think again! Starting your tax to-do’s earlier in the year makes life easier for your CPA, financial advisor, AND you.
Thanks so much to Elizabeth Moore, CPA and Partner at Ryan, Gunsauls & O’Donnell, LLC (http://www.rgo-cpa.com) for these top 5 actions to take NOW.
- Get your books and records in order for the year (i.e., record all of your cash receipts and disbursements in QuickBooks or the software of your choice, reconcile your bank and credit card accounts, update your mileage logs, gather receipts to document expenses, etc.).
- Donate to your favorite charity including churches, schools, or other 501(c)(3) public charities. You can even donate up to $100,000 directly from your IRA to a charity of your choice which counts toward your Required Minimum Distribution (RMD) for the year and isn’t includable in your adjusted gross income for the year, which is a huge tax benefit.
- If you haven’t met your deductible, get all of those medical and dental appointments out of the way and PAID for by check or credit card prior to year-end.
- Start researching the business vehicle of your choice, NOW, instead of on 12/31. To establish adequate business use (i.e. 50% or more) of a vehicle to get the maximum amount of depreciation deductions, buying well before year-end is a must.
- Take inventory of your business fixed assets (i.e. furniture, fixtures, equipment, vehicles, etc.) NOW and determine what you need to buy this year, instead of waiting until 12/31. Not only must the purchase occur prior to 12/31, it must be placed in service prior to 12/31 to be eligible for depreciation.
Remember, if you spend New Year’s Eve on last minute tax deadlines, who will be wearing that lovely lamp shade at the neighbors’ party?