7 Tax Strategies Blueprint

When we review a tax return, several factors can be considered to consider potential tax strategies you may be able to utilize and possible strategies for future years. Below is a blueprint to help understand the overall tax planning process. In conjunction with your conversation with your accountant, it can help you plan for cash flow needs and eliminate surprises. Understanding this process will help you better understand your finances and make conversing with your accountant easier and more productive.

Review the personal tax return and sources of income: W2, business, rental, interest, dividends, and capital gains. 

1. Is there taxable income? If so, what are the primary sources based on the list above?

2. If you have taxable income, how much? 

3. If it is below a certain amount, no taxable income is owed. This is based on your filing status, standard or itemized deduction amount, and other potential credits that apply to your tax situation.  

4. Strategies to reduce business income: 

• • Select the accurate entity
  • Keep receipts, mileage, petty cash, deducting all business expenses 
  • Identify any personal out-of-pocket expenses not picked up
  • Familiarize yourself with loan impact on taxes
  • Look for extra depreciation expenses with Section 179 
  • Check the information and documents needed if there is a building owned by the business
  • Ensure that deposits have hit the bank 
  • Become aware of any other business income

5. Strategies to reduce personal income:

• Retirement accounts – Simple, 401K 
• HSA 
• Tax credits

6. Use an end-of-year tax questionnaire to make sure you have your audit trail files documented and stored. This will ensure that all your bases are covered. 

7. Keep track of what was paid in tax estimates, if there was any W-2 withholding paid in, job changes, or withholding status changes. 

This will help you be able to review your situation as well as see where in this blueprint you can utilize the simplest to more complex tax strategies to maximize your tax efficiency and savings. 

In our Tax Essentials online course, you will learn more about this and the key tax strategies that minimize your taxes and maximize your tax efficiency! If you want to learn more about our online tax essentials course, click here. Use coupon code ROCKNROLL to access your first online course for free. To register for one of our upcoming events, click here.

Even better schedule a complimentary strategy session and get a free complementary tax return review for potential tax-savings strategies you can discuss with your accountant.