When it comes to keeping up with taxes, the farther you look ahead the better. That’s because you’ll have the opportunity to lighten your tax burden by making wise money moves earlier in the year. But, of course, few of us are thinking about taxes outside of those critical few weeks before April 15.
After the tax season, it certainly may be tempting to shove all of that paperwork to the bottom of your desk drawer and not think about it again until next April. However, planning ahead early on with your taxes in mind goes a long way. Happy Tax franchisees cam provide a valuable service to their clients by helping them manage their tax liability year-round. By connecting them with a skilled and licensed Certified Professional Accountant, Happy Tax franchise owners will be providing a valuable avenue to Happy Tax’s money-saving tax planning services.
Don’t be surprised by your tax bill, plan ahead!
Keeping up with taxes throughout the year gives the taxpayer more time to check for additional deductions, re-evaluate paycheck withholdings and go over, or adjust, contributions to retirement, bringing down their taxable income. In preparation, taxpayers may also have time to look at their capital losses and contributions to charitable foundations, increasing their deductible expenses, as well.
There are many tax benefits to planning ahead, particularly if you work with a licensed tax professional who is up on all of the most recent tax policies. For example, a Happy Tax CPA can help clients take a look at certain large deductible expenses and decide if “bunching” is the right way to go. Individuals who bring home a lot of variable income can also benefit substantially by some professional tax advice early in the year. That’s because if a great deal of your income is variable, it can be difficult to accurately estimate your end-of-year tax liability.
If your income fluctuates over the year, it may not be entirely clear which tax bracket you fall in when it comes time to file. By making a little extra money every now and then, some taxpayers even face higher tax liability because their variable income moves them into a higher tax bracket. This means they could end up paying most of that extra revenue they had earned back in taxes. By consulting with a Happy Tax CPA early in the year, taxpayers can claim valuable deductions and exemptions that save them big in the long run. This keeps taxpayers out of the dark by giving them the opportunity to anticipate different scenarios based on their income and qualifying deductions.
Happy Tax Franchises Stay Busy Year-Round
Since a Happy Tax franchisee’s main goal is to connect clients with our in-house CPAs, every Happy Tax franchise partner plays an important role in saving taxpayers money. And saving money is always popular, no matter what the time of year. So, although some tax franchises focus only on return preparation, Happy Tax’s in-house team of tax planning professionals are ready for new clients all year-round. This is particularly true in 2018, which marks the first year that the new tax law came into effect.
In keeping up with tax policy developments over time, tax professionals are coming up with innovative new solutions to tax liability challenges. This includes a relatively new concept called bunching. Bunching is a way that some taxpayers can make their deductions really count now that the 2018 tax law has increased the standard deduction. Bunching is exactly what it sounds like - bunching up itemized deductions in one year to surpass the standard deduction, then taking the standard deduction the next year. Consider an example: in order to deduct medical bills, they must be higher than 10% of your adjusted gross income. Generally, you have the option of paying the bill all at once or paying it off in monthly installments. If it would take the taxpayer more than a singular year to pay off the bill they would most likely receive no tax benefits from their out of pocket medical cost. However, if the taxpayer was financially able to pay the bill, either within a taxable year or all at once, this out of pocket cost could directly benefit the taxpayer as it would be deductible.
Many people, including business owners, investors, and people who have a side income, can benefit from tax planning assistance at any time of the year. That’s because they want to know today how to plan for taxes tomorrow. This creates year-round opportunities for Happy Tax franchisees, so long as they work hard to inform their potential customers about the benefits of working with Happy Tax.
Tax Planning Saves Taxpayers Money
The list of reasons why someone would want to consult with a tax professional outside of tax season goes on and on. When April comes around, as it always does, the pressure to get your taxes completed is on. If tax preparation was not at the top of their list, many taxpayers are stuck with a tax bill that they could have avoided. By helping people throughout the year, Happy Tax Franchisees help keep taxpayers from overpaying when April comes around.
Taxpayers who spend the year preparing for their taxes can plan their day-to-day financial activities – such as whether or not it is worth it for them to pay the bill in its entirety rather than stretch payments out – in a manner that limits tax liability. This is particularly helpful for taxpayers who invest in stocks, cryptocurrencies, or other assets. Taxpayers may want to pull their money out of an unsuccessful stock, claim the capital loss as a deduction and re-invest into a more successful stock this year, or wait until next year based on how their taxes add up. People may also want to consider the impact of out of pocket expense deductions, such as charitable donations, elective surgeries, education expenses. These sorts of expenses incur tax liability year-round, which means Happy Tax franchises have access to a massive client base all year-round.