The Importance of Tax Planning

The importance of tax planning and meeting with your tax preparer throughout the year has its advantages, especially at the end of the year.  Even if the meeting only lasts a few minutes, a lot of information can be exchanged quickly. Tax planning strategies can be developed, relationships built, understanding of your business/personal situations enhanced, and expectations established.

One of the most important aspects of the tax planning meeting is to eliminate surprises. Going into tax season, your tax preparer does not want to find out for the first time about something that occurred 6 months ago. They want to be proactive, not reactive. So should you. You do not want to face a tax liability that you were not expecting. You need to plan your cash flow accordingly and do not want to face interest and penalty for underpayment of tax that could have easily been prevented.

You hired someone to prepare your taxes for a reason. Utilize their expertise to determine the best course of action for you or your business. Decide together if it makes sense to reinvest into your business now, or if it makes sense to reinvest later. Decide together what is the best use of your cash. Decide together to be proactive and look forward.

Bob Wallish, CPA