Post Tax Season Thoughts

Two weeks past the April 15th brick wall, the CPA’s worst nightmare. Speaking for myself, and I trust many other CPA’s, we are not basking in glory as an athlete would winning a championship. Instead, this CPA is just glad I made it out of the tax season ring alive.

My thoughts have nothing to do with the months that have just passed. Instead, my thoughts are fixated on the future. In several of my past blog entries I made reference to the CPA being a historian. We pull together records of a year just passed and place the final results on official forms furnished by the Internal Revenue Service and state agencies, a historical tax view of “last year” in order to calculate how much you owe the government. What you do in this year’s future can make next years past much less of a surprise.

Now is the time to give thought to your financial situation, which includes taxes. Now is the time to plan properly for the 2014 tax return that will be due April 15, 2015 (March 15, 2015 for C and S Corporations. The #1 most important aspect of that planning is this – organization.

For individuals:

·       Consider using a program like Quicken to track your personal finances (if not already doing so)

·       Organize your receipts – regardless of the purpose of the expenditure, keep an organized paper trail. In dated order – medical; rental property costs (repair, insurance etc., by category & date); if you are a sole proprietor, sales and expenditures by category; real estate taxes; estimated taxes paid; etc.

·       Before you sell a stock or purchase a rental property, give your accountant a call to keep him/her in the loop.

For businesses (corporations partnerships)

·       Consider using a program like QuickBooks to keep your financial books and records.

·       Reach out to your accountant after June 30th to let them have an idea how your business is progressing (profitability, etc.). Reach out for advice (tax planning) to see what could be different.

·       For major business decisions (not everyday ones), ask your accountant if there may be any tax implications to the move you are about to make. Once it’s done, it’s done.

Bottom line is, if you are not already organized, don’t set yourself up for another stressful tax time. Give yourself an idea ahead of time where things stand. Surprises, especially of the paying kind, are the worst thing to deal with if you are not prepared.