When most people think about “tax time”, their first thought would be the weeks preceding the April 15th tax filing deadline.
This is, of course, the time when most (not all) taxpayers comply with the annual requirement to file tax returns with the federal and state governments. It is also the time in which we accountants are most busy.
But real tax planning moves need to be considered in the fall so that they can be accomplished in time to be beneficial for the current year. If you want to impact your tax return in a positive way, January is too late.
Do you have a big capital gain that is going to be taxed in 2016? Is there another asset that could be sold at a loss to the big gain? Have you taken full advantage of employer offered 401k or 403b plans? Are you current with the accounting for your small business or rental property? Do you know if you have a profit?
Last, but not least, December 31st is the deadline for making a tax deductible donation. Remember that only a deduction to a 501(c)(3) can be deducted. Political donations are not deductible. Many organizations make year-end requests for donations. If you are having a good year for income, consider whether or not pushing up a 2017 donation into December 2016 could give you a better tax benefit.
Remember the best time to think about your taxes is now. That is between world series games. 🙂