The year has passed and tax season is approaching. Now what, is it too late to get tax deductions for the year just ended?
Maybe, maybe not.
To be clear, you cannot go out and buy a lot of office supplies and claim it as last year expenses, that opportunity passed at December 31 midnight.
However, two opportunities do still exist.
One is if you are a small business owner or have a side gig you might have spent money for a legitimate business purpose but missed classifying it as a business expense in your records and could be missing out on tax deductions.
So this is where record keeping is critical to lowering your tax bill. Go back and review your past year transactions and look for possible missed business expense purchases.
If you are one of my clients we have some tools to help with that process.
Second and this is the more fun one in my opinion is your self-employed retirement plan contribution.
As a CPA and financial advisor I see and do lots of different kinds of tax returns, individuals, self-employed Schedule C, S Corporations, C Corporations, Partnerships, non-profits and a few trusts.
I am constantly amazed by the number of small business owners who did not know that they can often contribute to their own self-employed retirement plan and not just their own individual IRA account assuming certain criteria are met.
There aren’t many plan types that you can contribute to after year end but there are some. For those I do tax returns for that’s one of the things we often look at as the tax return is coming together.
However very often when its time to file the tax return, both the money needed to fund the retirement plan and the cash needed to pay remaining taxes is more than the cash on hand.
Not paying taxes owed is a bad thing and so often the opportunity is missed for a retirement fund contribution and a missed tax deduction opportunity.
If you do have a plan setup consider contributing before the tax deadline. If you don’t have a plan setup or not even sure if you have a plan or what type it is let’s set up a call and talk through your questions before the tax return deadline makes it a missed opportunity.
The information in this and other articles is intended to be educational in nature only. Not tax, legal or investment guidance for you specifically. Each person’s situation is unique and you must seek appropriate professional guidance that can address your unique situation.