Wednesday, February 3, 2016

February Tax Planning

As many individuals scramble to organize and complete their personal income taxes in time for our government April filing deadline, one should also consider what can and should be done to be better prepared for next year. Our tax laws and requirements are complex and it makes sense to plan throughout the year to achieve the most advantageous tax position over time.

As a business owner or for individual purposes, knowing tax law will be of great help in decision making. Waiting until December to make a series of quick decisions can lead to less-than-optimal results. Today, none of us knows exactly what positions we will be in by December, but many of us probably know what expenditures and investments will be necessary and desirable this year. It might be safer to wait until December to buy a more efficient piece of equipment when available cash amounts are more clear, but that probably will not produce the best business results or tax advantage for the year.

Perhaps 2015 was a good year for you and you have decided to pursue a new business opportunity or give some added support to your favorite charity. Knowing a little about the various tax laws can be helpful in each of these circumstances. Federal taxes play a role, as do state and local taxes. Wisconsin offers some excellent tax incentives for new business ventures, venture capital and charitable giving that might prompt a different course of action.

If you don’t care to learn or don’t want to take time to learn about tax laws, a good tax adviser will help immensely. Tax planning is a year-round process, not just a December exercise.