Tax planning that happens before the bill
A tax return records what already happened. Planning changes what happens next. Jerome helps individuals, self-employed people and small businesses make the right moves while there is still time.
Tax planning means estimating your tax before the year ends and then acting to lower it legally: timing income and expenses, choosing the right business entity, using retirement and charitable strategies, and paying the right estimated amounts so there are no penalties or surprises.
Why planning beats preparing
Preparing a return in March is like reading last season's box score. Useful, but the game is over. Planning is the coaching that happens during the season, when a decision about salary, equipment or a property sale can still move the number.
For business owners and investors in Florida, the federal return is where the money is: there is no state personal income tax, so every planning dollar goes to your federal bill and your quarterly payments.
What a planning engagement covers
- A mid-year and year-end tax projection
- Entity review: sole proprietor, LLC, S-corporation or partnership
- Reasonable salary planning for S-corporation owners
- Retirement plan options: SEP-IRA, Solo 401(k) and traditional or Roth choices
- Qualified charitable distributions from IRAs for those age 70½ and older
- Timing of equipment purchases and large expenses
- Capital gains timing and loss harvesting for investors
- Estimated tax payments set at the right amount
Who gets the most out of it
Owners whose profit jumped this year. Real estate investors who are about to sell. Anyone who wrote a large check in April and promised themselves never again. If your income changes from year to year, planning pays for itself most often.
See also: quarterly estimated taxes, business tax returns and investors and families.
Common questions
When is the best time to start tax planning?
Now, and ideally by mid-year. Most strategies only work if they happen before December 31, and some, like changing how an S-corporation pays its owner, work best when set up at the start of the year.
Is tax planning only for high earners?
No. Anyone with self-employment income, rental property, investments or a big life change (a sale, a new business, a retirement) can benefit. The bigger the swing in your income, the more planning matters.
Do you prepare the return too?
Yes. Most planning clients also have Jerome prepare their returns, so the plan and the filing match.
It's always tax time. Let's get ahead of it.
Tell me what is going on with your taxes or your business. A short call is usually enough to know the next step.