Libman Tax - December 2018




Tax Season Begins in December

I Can HelpYou Save Big

With the end of the year coming up, your day- to-day routine has likely gone into hyperspeed in order to keep up with the pandemonium that surrounds the holiday season. Between getting your house ready to host those big family dinners and traveling from store to store to get your kids that new action figure they really want, taxes and financial planning are probably the furthest things from your mind. I get it. People think they don’t have to file taxes until “Tax planning is complicated and messy, but taking the steps to get your finances in order in December will help you in the long run.” April, so why would they need to think about finances during December? I’m here to tell you that when it comes to taxes, December is the most important month of the year. If you are hoping to make any meaningful changes before 2019 or save money for the last year, be sure to reach out to me before lighting off those New Year’s Eve fireworks. There’s a wealth of information you should keep in mind in your financial planning, and I’ve included some important steps below. FIRST STEP Before you can even think about getting any cool tax savings, you have to know where your finances stand. December is an ideal time to get your accounting in order. Start by recording your income, then take notes of your expenses and the amount you’ve already paid in taxes. Organizing these details before the end of the year will not only help you eliminate some of the stress that accompanies tax season, but

it might help you find some new ways to save what you didn’t have time to research in the years prior. FOR EMPLOYEES If you are an employee working for a company or corporation, you might want to consider meeting with your human resources representative and increasing your 401(k) withholdings. You could also increase your federal or state withholdings

simultaneously. This would help ensure that you won’t receive a

tax bill or that you might get a larger tax return in April. If this idea seems complex, feel free to give me a call at 626.280.6865.

FOR BUSINESS OWNERS If you are a business owner — whether it’s an S or C corporation — then the process of organizing and assembling your numbers grows significantly more complicated. First of all, because you are both an employee of the business and the owner, you have to give yourself a “reasonable wage,” a task that might seem simple but is actually quite difficult. I’ve seen many cases where business owners underestimate their wage as an employee and cause problems for themselves later on. To add to this complexity, owners also have to establish a 401(k) plan, a charity plan, and a captive-insurance plan. They could also consider buying any of their company machinery on credit in order to get the 179 bonus appreciation. Lastly, with the new Trump Tax Plan, there are several steps you have to go through in order to determine if you can qualify for deductions. In general, tax planning is complicated and messy, but taking the steps to get your finances in order in December will help you in the long run. If you have questions about how you can save money on taxes this upcoming year, give Adam a call at 626.280.6865.

-Adam Libman

424.253.0200 • 1

Published by The Newsletter Pro •

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