As the summer months roll around I imagine the last thing on your minds is your taxes. Below is a list of reasons why you would want to consider performing a mid year tax projection. A mid year tax projection is a great way to determine what your tax liability will be at the end of the year.
Financial and/or life circumstances have changed in the current year. If you have experienced the following life changing events a mid year tax projection will help you understand how these changes affect your tax situation.
-Purchase of a new residence
-Purchase of investment real estate
-Start a business
-Have a baby
-Loss of a job or other income source
If you pay estimates. Since estimates are based on your prior year tax return, any changes in your financial situation could alter your required payments in the current year. Estimates are subject to reevaluation and adjusted based on your actual current year income to date. Therefore, you avoid over payment and increasing current cash flow or avoid underpayment and the accompanying penalties and interest.
If you usually owe taxes upon filing. By doing a mid-year tax projection this will provide you with ample time to save up and plan for your tax bill. If required or desired we can set up tax estimates. Or, simply avoid the surprise of an unexpected tax bill come April.
Insight into your with holdings. A mid year tax plan can also provide you with insight on your with holdings to determine if you have either too much being taken out of each paycheck or if you are claiming too many exemptions.
If you are a business owner. Performing a mid year tax plan is beneficial in a number of ways. A tax projection will provide a transparent path from how your business is performing to the tax implications through to your individual tax liability.
There is a multitude of tax strategies that could be available for the above-mentioned circumstances given the appropriate amount of time to implement. Interested in learning more about mid year tax projections contact The Garabedian Group CPAs today!
“Any difficult task seems easier if you break it down into manageable steps.”
― Claire B. May Gordon S. May