As 2022 comes to a close, it’s important to talk about year-end tax planning. Now is the ideal time to employ those last-minute strategies that can help you save on taxes.
In our recent article, we share a checklist of must-dos for tax planning at the end of the year. Here’s a snippet of what we covered in the full article:
Focus on the Long Term
When engaging in tax planning, think about the long term and not just one year.
Consider the following:
- What can you do to help save taxes over the long term?
- What are your goals?
Looking at the bigger picture can help you avoid making decisions that will benefit you now but hurt you in the long term, particularly if you’ll likely be in higher tax brackets in the future.
Shift the Timing of Expenses and Income
Review your expenses and income. Can any planned expenses be bumped up before the end of the year? Things like equipment purchases or investments can help offset income this year. These were planned expenses anyway, so accelerating them to 2022 can help reduce taxes for the year.
When reviewing your income, consider whether it can be delayed until after the new year. For example, you may have your clients make payments in early 2023 rather than at the end of 2022.
Increasing spending and reducing income at the end of the year can help you save on taxes.
Take Advantage of Deductions and Specialty Tax Credits
Tax planning also means reviewing your financials in-depth, maximizing deductions, and looking to see if you qualify for specialty tax credits. For example, do you qualify for research and development tax credits?
We cover these points and more in greater detail in the full article, which you can read here.
To learn more about how Hayden Nelson & Yoder can help you with year-end tax planning or to schedule a call, contact us here.