November may seem like an unlikely time to think about your taxes, but it is actually a great time for a “check up” with your tax professionals, including tax attorneys and accountants for three good reasons:
- November is typically a somewhat slower month for tax professionals, so they may have a bit more time in their schedule for you.
- If there are actions that must be taken prior to the end of the year, a November meeting will give you time to get things done.
- You may be able to estimate your tax payments. Finding out in November what you owe is better than finding out in March or April. Most people truly don’t like surprises when they involve finances.
Some things to consider adding to your to-do list in November:
- Begin to get your business and tax affairs in order now. Gather your receipts for smaller items that add up, whether it is office supplies, business function receipts or your mileage logs. Organize these at the very least into separate files or envelopes and at best with accompanying spreadsheets (Excel is fine; nobody will insist that you use an accounting software, but extra points if you do!)
- Make end of year decisions now about 2015 tax-deductible giving, so you’re not trying to get checks to clear as 2016 is ringing in. If you are planning to donate goods, be sure to notate what you are donating and their values.
- Are there other business expenditures that should be made now because of the tax consequences? Consider your office equipment from copiers to computers to phones to furniture, even the office car, van or truck.
- Hiring Decisions: If you have experienced either growth or some contraction in your line of work, what will your likely hiring decisions be in the next nine months? When does it make sense to actually start somebody? Working backwards, when should you start the process?
- Cash Flow Options: Money comes in and so do the bills. With a little bit of lead time, you can determine whether you want to pay bills in December or defer until the first of January. If you give out bonuses or extra compensation, it might behoove you to consider the timing of that as well. And there might be a reason to delay bringing in income, especially if there is a significant tax consequence. All of these aspects of running your business require planning that cannot occur on December 31st.
November is surely a time to be thankful and to anticipate all that this time of year brings. But it can also be a time to get your financial ducks in a row, so that April 15th is easier for you and your tax advisors.