The initial tax filing deadlines are past. Many of you have filed your 2014 income tax returns at this point while several of you still need to complete your 2014 returns. In either case, you would be wise to consider your 2015 tax situation and plan for it now. As I have stated many times, proper planning brings forth desired results and tax savings. At Weech Financial, our goal is always to minimize tax liability through advance planning and to have the final tax return reflect the target of our planning efforts.
For those of you who are self-employed and who are generating noticeable profit from your business, you may need to be making quarterly estimated income tax payments throughout the year to satisfy your tax liability with the IRS and state taxing authority. If you are required to make quarterly estimated tax payments, the first quarter payment was due on April 15th and the remaining three payments are due on June 15th, September 15th, and January 15th of next year.
I highly recommend a mid-year and/or late-year income tax analysis and projection to determine where you stand from a tax liability standpoint so that potential tax moves or actions can be taken to minimize your tax liability for the year. Most times, the tax savings produced through the tax planning process far outweighs the professional fees paid to conduct the analysis. This is confirmed many times each year as my clients return to have an analysis completed because they saw the benefit of doing so in previous years.
Another issue that should be addressed is whether your business structure is set up properly to minimize your tax burden. Often, my clients see a reduction in their annual tax liability simply by restructuring their business entity set up.
The last thing I want to emphasize is that, after all tax saving strategies have been employed, you need to ensure that adequate federal and state tax payments are made, either through wage withholding or quarterly estimated tax payments, so that you neither owe large amounts or have large refunds at year-end. Breaking even should always be the goal each year. A large refund means the government held your funds interest-free throughout the year. A large amount due at year-end typically involves estimated tax penalties, late payment penalties and interest, none of which are necessary.
Contact us to discuss specific tax planning opportunities that may apply to you.