Do you feel rushed and confused during tax season? This week on our Instagram Live, we hosted Mouri Khan to discuss the importance of having a mid-year tax check-up with your accountant, whether you are a business owner or not!
What are the benefits of having a mid-year tax check-up?
-
Being informed about beneficial tax strategies:
Working with an accountant mid-year can allow business owners to be aware of additional benefits they might be eligible for. For example, Mouri mentioned how some business owners could’ve claimed more than the $400 working from home tax claim if they worked with their accountant and see if they were eligible for more benefits. Having a mid-year tax check-up with your accountant can help business owners stay informed and prepare for the tax they might need to pay.
-
Identifying tax strategy differences:
Tax planning can be different for each individual depending on their life stage and situation which might impact how individuals can optimize their taxes. For example, married, divorced, and single individuals may have different tax planning strategies to optimize their taxes. A mid-year tax check-up can let accountants acknowledge any changes in your life and adjust your tax planning to meet your needs.
-
Getting organized:
Do you struggle to go through all your documents during tax season? Having a mid-year tax check-up can let you organize your documents ahead of time and save any complications that may arise last minute during tax season.
-
More opportunity to Tax Plan:
Going through a full year of tax documents to create a strategy while understanding your personal situation might be challenging for accountants if it’s left to the deadline in April. As accountants get busier during tax season, they might not have the capacity to focus on your tax situation as they would during a mid-year check-up. Having a mid-year tax check-up can take off some pressure with the looming tax deadline and help them to zero in on your best opportunities to pay less tax.
-
Distributing your assets:
If you have investments or recently sold any of your investments, talking to your accountant as soon as possible is critical for your accountant to adjust your tax strategy accordingly. If you have a partner that might impact how your assets are distributed, an accountant can help you manage the ownership of assets in a way that will maximize your returns.
-
Leveraging your business income:
Many people have started side hustles during COVID for secondary income which has tax implications. For business owners who might be tempted to hide their cash income to lower their taxes, working with an accountant can help you find tax opportunities that might leverage your business while claiming your true business income for tax purposes.
Our tips for your mid-year tax check-up:
-
Take advantage of your deductibles:
Business owners who rent their living space can claim a part of their rent as an office expense which could’ve benefited them more than the $400 work-from-home tax claim. In addition to rental space, office furniture, business meals, phone bills, mileage, and all other business-related expenses can be deducted from the net income of the business which lowers the tax business owners might owe to the government.
-
Manage your business structure:
Depending on whether your sole proprietorship is limited or incorporated, your tax deadlines might be different. If your business is owned by multiple partners, the ownership structure of the business can also impact your taxes. Speaking to your accountant can help you understand your situation and plan your timeline accordingly. In addition, an accountant can project your expected annual profits and draw a tax plan accordingly, helping you to save for the tax you may owe during tax season.
-
Separate your personal and business income:
An accountant can also help you to separate your personal income from your business income. It might be common for some business owners to not pay themselves a salary as they run their business, which can both complicate their personal finances and business taxes. Overall, an accountant can both help you put your business and personal taxes and finances on track.
-
Understand your accounting costs:
Tax accountants charge per hour, and relying on them to be a bookkeeper in addition to being your tax accountant might lead to increased billing as the accountant will be spending more time on your taxes. Finding a separate bookkeeper with lower hourly rates might save your business some money and help your taxes.
We hope you enjoyed reading our blog post! Check the full live chat here. You can find our live chats and more of the latest financial news on our News Blog. Stay tuned to learn more tips on a new topic each week on our Instagram Live at 5 on Instagram! Aside from our live chats, we post daily financial updates on social media! Follow us on Linkedin, Twitter and Facebook and Instagram.
More Financial News & Events
Managing growth for business owners
May
Are you a lawyer with questions on how to grow your investments?
May
Cultivating a growth mindset around money
May
Why financial growth can be deceptive
May
Home and Financial Document Organization
Apr
Business owners, it’s time to start spring cleaning.
Apr
Spring Cleaning Your Finances
Apr
Unique financial challenges female lawyers face
Mar
Taking Action: A Woman’s Perspective on Deciding To Tackle Her Finances
Mar
Is there a gap in your income protection?
Mar
Knowing the difference between Tax Filer and Tax Advisor
Mar
Conquering Women’s Fears Around Finances
Mar
Trends in Family Law
Feb
PART 2: Financial Conversations Couples Need To Have at Different Life Stages
Feb
Financial Conversations Couples Need To Have at Different Life Stages
Feb
Disruption and Reinvention: Starting a Second Career in your Forties
Jan
How to create a strong financial fortress during market downturns
Jan
Creating a Financial Vision Board for 2023
Jan
5 Tips to set yourself up For Financial Success in 2023
Jan
Year-end Donation strategies
Dec
Year-end tax planning
Dec
Getting clients organized for 2023
Combating Quiet Spending
Nov
Our Client’s Journey to Building Financial Confidence
Nov
How Working with an Advisor can Improve your Confidence
Nov
A letter from the CEO’s desk
Nov
Getting Psychologically Ready for Retirement
Oct
Retirement Planning for Business Owners
Oct
Top Issues Clients Face with Retirement
Oct
What Risk Means for your Investment Portfolio
Oct
Finding Investment Opportunities in the Market
Sep
Behind The Scenes On Helping Our Clients Choose Investments
Sep
How to Deal with Debts Amidst Rising Costs
Sep
Buying and Selling Homes as Prices Fall
Aug
Parenting and Back to School
Aug
Dealing with the high cost of living
Aug
Ask Team Jackie Porter Series – Financial Planning with Jin Lee
Aug
Budgeting for Home Renovations
Jul
Mental Health and Finances
Jul
Planning a Vacation Post Covid
Jul
Dealing with spending pressures
Jun
Behind the Scenes – Working with Lawyers on a Financial Plan
Jun
Positive Experience with Financial Planning – A conversation with Erin Leslie
May
What Are the Process of Putting Together a Financial Plan? – A conversation between Jackie and Jin
May
Creating Financial Transformations
May
Building A Brand Effectively in Second Quarter – A Conversation with Cassie Drake
May
How to boost your business mojo – A conversation with Valeri Hall Little
Apr
How to make a financial fresh start second quarter? 5 principles from Jackie Porter
Apr
The #1 Challenge that Leaders Face, from the Founder of Green Apple Consulting – Lisa Mitchell
Apr
What is entrepreneur resilience? A conversation with Karen Dean
Mar