FREQUENTLY ASKED QUESTION: When do I start getting ready for year end planning and what does my accountant need from me?
Anyone operating a business should consider having their accountant prepare a mid-year tax plan around August or September of each year.
The purpose of mid-year tax planning is threefold:
- Determine what tax savings strategies will be available in the current year and plan to ensure that your business meets the criteria for the applicable strategies.
- Identify ways to defer taxes to future years in order to improve current-year cash flow.
- Calculate the amount of tax that will be due at the end of the year after all tax savings and tax deferral strategies have been exhausted in order to allow time to accumulate enough cash to pay your tax bill without having to work out a payment
Even if you do not have your accountant preparing or reviewing your books monthly/quarterly and even if you opt to forego a formal mid-year tax plan, you should begin to organize your receipts, income items, and expense items around July or August each year so that you do not get overwhelmed at the end of the year when you suddendly find that you have to go through twelve months worth of records.
