How to do year end tax planning

Before we get to far, I need to put this on the record:

I hate "year end tax planning"... like hate it... with a passion...

Why? 

Oh brother, there are so many reasons why I hate the very concept of "year end tax planning".

Now, understand this... words matter... they do. 

And hate is a very strong and powerful word that should not be used lightly.

But I mean it when I say, I really hate year end tax planning...

What should be done instead? 

Optimally you've been optimizing during the year. If not, there is a solution for that and that will be mentioned later.

For now, you're in triage mode. So here's what you need to do:

1) Get your numbers straight. 

If you're not doing weekly or at minimum monthly record and bookkeeping then start NOW! 

Tax mitigation and tax planning knows with knowing your numbers. 

2) Avoid "quick fix" solutions

By this I mean, avoid the urge to make large purchases of equipment or vehicles in an effort to wipe out income with a large write off.

If you need to purchase eqipment or vehicles for your business, by all means, do this.

But don't jump into these things with the intent to reduce your tax bill. Make fiscally sound moves that will leverage your business forward with things that your business needs.

3) Examine your deduction optimization

Are you capturing all of your write offs? Are there things missing because you're not keeping current on your books and records?

Optimizing your medical costs, hiring children, capturing your vehicle expenses (milage) and making certain that your deductions are optimized.

4) Think about the future... 

Retirement contributions can be a powerful tax reduction tool to cut your taxes now.

Making the efforts to establish and fully fund your retirement plans prior to year end will give you a large tax break while escaping what I call "the big check syndrome".

By "big check syndrome" I simply mean, STOP writing large checks. 

I can't tell you how many times in my career a business owner has come to me at the last moment and wants to contribute to retirement plans but can't come up with the money to both fully fund their retirement plan AND pay their tax bill.

Tackle this issue a step at a time and get those retirement contributions put into the accounts DURING the year and stop missing out on this powerful tax deduction.

5) Start now!

If you start your tax planning NOW and make a commitment to connect with a qualified professional quarterly to work to reduce your tax burden, you can get into a rhythm of optimizing your taxes year round and avoiding the mad rush at the end of the year.

The government has a system to take your hard earned profits.

Fight back with a system of your own.

Tax Reduction University gives you a system by which you can keep more of your money where it belongs... in your bank account, in your business, and in your home.

If you haven't already signed up for the Tax Reduction University Tax Tip Tuesday newsletter, you should do so now... here: www.TaxReductionUniversity.com/taxtips