Preparing and filing your annual tax return can be a real chore that few people look forward to. It can be tempting to wait until the last minute to gather the necessary information and complete your return. Earlier tax planning can reduce the stress of paying taxes and also save money by eliminating costly mistakes.
Taking advantage of deductions and credits
Early tax planning can really help you put certain tax deductions and credits in perspective because they might not be around every year. The earlier you are aware of them, the earlier you can take actions and make the most of them. For example, the newly introduced immediate deduction for start-ups brought good news to those who want to go big and embrace new structure.
Save money by avoiding a surprising tax bill
Early tax planning not only makes you aware of the due date so that there will be no nasty late penalty, it can also help you avoid the surprise of a big tax bill at the year end. If you are eligible to receive a tax refund, wouldn’t it be better to have the money back early and start investing? Overall, tax planning will make it better in managing your cashflow.
Plan for long term and save more
Who says tax planning can only be short term? With the right assistance, tax planning can go beyond the year-to-year planning. Long-term tax planning can reduce the amount you owe in the future. Changes in your financial life, such as retirement or inheritance, have major tax implications that you can account for if you plan ahead. Estate planning and retirement planning can ensure that you save every bit you can for later.
Submitted by Ruby Qin