Efficient tax planning begins now. To properly plan for tax efficiency, the tax planning process should begin now for individuals and companies with calendar year ends. Notice I said tax efficiency and not tax minimization. Not all planning is should be done with just the current year liability issue in mind. Projecting to the future, utilization of net operating losses, alternative minimum tax considerations and other factors can dictate income acceleration, expense deferment as well as income deferment and expense acceleration. Retirement plans also enter the process. At Fragnoli & Company, CPAs in Brentwood and Hendersonville, TN, we always advise our clients that waiting until November or December to perform and execute a tax plan can create a lot of problems, particularly with cash flow. For those of you who have your own businesses, with a proper set of books you can probably project you financial position before a tax efficiency plan with considerable accuracy.
A solid tax plan has many moving parts and issues for consideration. As stated above, you need to look at retirement plan considerations; also, there are bonuses for personnel, inventory review, deferred compensation considerations, equipment additions and facility expansions to name a few more tax planning factors. If you and/ or your company start now, you can develop a quality and efficient tax plan and map it forward as you move through the second half of the year. Doing this will enable you and/ or your company to make quality and economically sensible financial decisions that have the best tax impact.
If you and/ or your company are looking for someone to perform a tax projection and prepare a quality tax plan, we at Fragnoli & Company, CPAs would love to hear from you. Please feel free to contact our office at (615) 377-0705 to schedule an appointment.