Right after the Tax Season...

As soon as our clients file their taxes, we engage with them to review the final tax returns, and see how we can help improve their tax situation for next year. A few recent meetings with business owner clients highlighted how many tax-saving opportunities are missed when business owners do not understand or share their full financial picture with their tax preparer — and in some cases, the tax preparer does not even ask them to share.

In these post-tax return meetings, we uncovered potential opportunities such as:

1. Not having a retirement plan for the business. Options such as SEP IRAs, SIMPLE IRAs, Individual 401(k)s, or traditional 401(k) plans can help business owners put away pre-tax income toward long-term retirement goals.

2. Not investing these retirement funds in line with long-term financial objectives.

3. Missing legitimate business expense deductions such as home office, automobile, travel, business meals, phone, internet, computers and accessories, and even tax preparation expenses when a tax professional is involved.

4. Not opening and contributing to Health Savings Accounts (HSAs). These accounts should ideally be fully funded each year and, if possible, allowed to continue growing for future healthcare needs later in retirement.

5. Missing 1099s from investment accounts or K-1s from partnerships and other entities.

6. Not implementing tax-loss harvesting strategies throughout the year.

The list can go on depending on individual circumstances. The bigger takeaway is this: who is helping you with strategic tax planning year after year? Your CPA or EA is often overwhelmed during tax season. Your financial advisor should be helping you think through these strategies throughout the year. That is what we strive to excel at.

Connect with us and let’s explore the possibilities.