Is it too late or too early?
Tax planning is a tool that doesn't end with the close of the calendar year. There are many ways to continue to manage your tax strategies throughout the year.
By working with us as your tax consultant, we will sit down with you and compare last year's return against this year and look for ways to manage income and expenses, credits and deductions to ensure your return is accurate and working for you.
Depreciation of assets is a way to plan for timing of expenses. For an example, a startup business, such as a tax firm, purchases a great deal of assets in the first year of operation. By using depreciation, the business owner can plan, not only for this year, but for the next 5-7 years because of the opportunity that depreciation gives us. You have options to accelerate depreciation or slow it down depending on your specific need.
You have time yet to take advantage of a Traditional or ROTH IRA or possibly a Health Savings Account deposit to lower taxable income for 2021. Before contributing into your account, make sure your health insurance plan is permitted to have an HSA.
Do you have extra room in your 12% tax bracket bucket? The 12% tax bracket ends at $41,775 for single and $83,550 for Married Filing Joint for 2022; put these brackets to work for you to utilize this lower bracket by bringing income into 2022 and paying this lower tax.