For the average taxpayer, their tax return is something they focus on only once a year. In order to leverage the benefits of a tax return, it need to be part of your everyday activities.
Here are 3 ways to of getting the most out of your tax return:
What you do in your business impacts on your tax return.
Bought anything?
Sold anything?
Received money?
Entered into any agreement?
All these routine activities in your business has an impact on your taxes, particularly how your tax return will be filed.
Discuss your specific business activities with your tax advisor to gain understanding of how these activities will be reported on your tax return and to ensure these activities work with your tax strategy to minimize your taxes.
Wouldn’t it be better to know, before your tax return is prepared, how to change your activities in order to give rise to a better tax result? This will be valuable information to apply during the time you are engaging in the business activities.
Keep documentation up to date
Nothing good comes from rushing to get tax return information together in order to file a tax return. Information gathered in this manner if often incomplete and inaccurate.
Once you understand how your activities impact your taxes, you can develop systems to keep documentation you will need for tax return.
By following this approach, you make the tax preparation process much smoother and more accurate – this will further leverage the benefits of your return.
Always know where you stand
You probably know of tax advisors who brag how their clients receive big tax refunds. A refund can seem great if it isn’t expected, but it usually indicates a lack of strategy.
With proper tax planning, that refund can be received much earlier. While most people don’t want to owe tax, they also don’t like to give away money any earlier than they have to = and this is exactly what a tax refund reflects.
Where do you stand – is a refund owed by or owed to? This is important information to know throughout the year.
Never underestimate the value of your tax return. It’s a huge part of the success of your business and the final step of making tax savings a reality.