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Tax Smart Trilogy: Getting a Head Start on 2024 Tax Planning Part I

Date: December 27, 2023

Part 1: Proactive Tax Prep: Jumpstart Your 2024 Tax Savings Now!

Getting Ready BEFORE December 31st

Welcome to the first installment of our three-part series dedicated to savvy tax planning! As the year starts to wind down, the time to optimize your 2024 tax situation is right now. This isn’t just advice – it’s a necessity. Waiting until the last minute can lead to missed opportunities and, worse, overpaying on taxes. Let’s dive into practical steps you can take today to ensure you’re not giving away more of your hard-earned money to taxes than necessary.

📊 Get Ahead with Your Financial Review

Explanation: By having a clear picture of your financial year, you can identify potential areas where you could either save money or where you’re potentially at risk for a higher tax bill. By being aware now, you can make strategic moves before year-end.    

Action: Begin by thoroughly examining your financials from this year. This includes analyzing your current income, expenses, and projecting your end-of-year financial standing.

Benefit: Forecasting your year-end situation allows you to strategize and anticipate tax obligations, providing opportunities to reduce your taxes substantially.

BONUS TIP: Projecting out the end of year income allows you to calculate your tax bill ahead of time so you can take steps to bring it down. Programs like QuickBooks Online can do most of the work for you in minutes.

💸 Uncover Hidden Deductions

Explanation: Every year, numerous deductions go unclaimed simply because business owners aren’t aware of them. By being proactive and informed, you ensure you’re not leaving money on the table. 

Action: Explore opportunities for tax deductions. Evaluate any investments or business-related expenses that could translate to tax benefits. 

Benefit: Maximizing your deductions directly lowers your taxable income, which can lead to significant tax savings and bolster your financial health.

BONUS TIP: Check out a ‘Schedule C’ online for a quick and easily accessible list of all the different types of deductions you can use.

🌱 Save For the Future with Retirement Contributions

Explanation: Contributing to these accounts doesn’t just secure your future—it offers immediate tax benefits. Money placed in these accounts is often tax-deferred, meaning it won’t be counted as part of this year’s taxable income. 

Action: Assess and potentially increase contributions to your retirement accounts, such as 401(k)s or IRAs

Benefit: By maximizing your contributions, you’re effectively cutting down your current tax bill while ensuring a more financially stable retirement in the future.

BONUS TIP: Depending on the type of retirement you have set up – there may be limits to how much you can contribute. If you put in too much, there’s a tax for that.

🤝 Consult With a Tax Strategist:

Explanation: The tax landscape is complex and ever-changing. Having an expert in your corner ensures you’re navigating these waters with the best information and strategies at your disposal.

Action: Connect with a tax expert to review your financial position and explore further tax-saving opportunities. At a minimum, make sure you get a second opinion.

Benefit: A tax strategist can pinpoint specific tactics tailored to your unique situation, potentially saving you thousands in tax dues.

BONUS TIP: Remember, not all CPAs specialize in proactive tax reduction. Seek out a professional who focuses on strategic tax reduction and has the expertise you need.

As we bring this year to a close, seize control of your financial future. Every tip and tactic we’ve shared is a step towards substantial tax savings and greater financial empowerment. Remember, it’s not just about gaining knowledge – it’s about taking decisive action. If the thought of tackling your taxes seems daunting, or you’re not sure where to start, we’re here to help. Together, we can devise a tax strategy that sets you up for a thriving 2024. Don’t delay – the time to act is now! Reach out and let us guide you to your most financially successful year yet. This is just Part 1 – stay tuned for more insights in the upcoming installments of our tax-smart series!

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