New year. New president. New tax rates from Congress. We can’t predict what all this change means, but we can try to prepare for it. Whether you are a corporation, small business, or individual, you need to be ready. One place to start is the Internal Revenue Service. Here's what the IRS announced about 2017 tax rates, standard deductions, exemption amounts and more.
Understanding the implications of the changes and the impact these changes can have on your business and/or estate will help you navigate the year ahead. Although every situation is different, here are five points to consider when preparing for 2017.
Meet With Your Tax Advisor
To reduce tax liabilities and prepare for the coming year, it’s good to have a plan in place. It can be an overwhelming task, especially given the expected tax changes. Having a pro on your side is the best way to ensure you’re doing it right.
If you have a trusted expert, talk to him or her early and as often as needed. When looking for a new tax professional, make sure they are a certified public account or a business tax attorney. When you’re ready to start, here are four tax tasks every business should do to prepare paperwork and manage stress during tax season.
We all know 401k plans are designed to offer employees advantages over individual retirement savings plans. Did you know small businesses also see tax advantages from offering 401k plans, including tax credits and deductions? Read more about the benefits of setting up an employee retirement plan.
Charitable contributions offer another way to give back while getting tax deductions. In addition, the U.S. Small Business Administration offers suggestions on how small businesses can get tax deductions for charitable giving. For example, consumers often have a more favorable image of companies who are philanthropic.
Maintain A Cash Reserve for Taxes
Be prepared in case unexpected costs pop up from taxes. A cash reserve is an important aspect of running a business, but it’s sometimes overlooked. Plan now to ensure you have enough to meet emergency needs. Savings accounts, certificates of deposit (CDs), and money market accounts offer higher interest-bearing accounts than checking accounts. These are good options to help build your tax reserve.
Each year, it’s a good idea to familiarize yourself with any tax changes. This year is no different. Take some time to educate yourself on what, if any, 2017 changes may impact your business. Small Business Taxes: What to Expect in 2017 takes a top-line look at deadline changes, bonus depreciation, corporate tax rate changes and more. Don’t stop there. Talk to your tax advisor for specific recommendations and guidance on how to manage your taxes.
Now is the time to review your estate plan, deductions and investments. With a solid understanding of the various taxes that may be assessed on your income, consider the potential issues for your specific tax situation.
By implementing a long-term commitment to holistic tax planning, you likely will be prepared to navigate today’s changing tax rate environment more efficiently.
Enterprise Bank & Trust does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisers before engaging in any transaction.