As you plan for 2017, you don’t want to lose sight of what’s required of you (and your company) to finish up the current year in the appropriate manner.
Now’s the time to look at the past, review the here and now, and make changes to improve your tax situation in the future.
While some companies have a system in place for preventing tax errors, others continue to get mixed up from time to time. Here are five things you don’t want to do:
- Underpay estimated taxes. It’s important to avoid this, as coming up short will mean you owe money along with your final return. Furthermore, if you don’t make payments of 90 percent on your current your tax bill or 100 percent of last year’s tax bill, you will be charged a penalty.
- Waiting to make big purchases. You don’t want to waste money just because it’s the end of 2016, but you should definitely consider making big purchases this year as a means of boosting your tax deductions.
- Do it yourself tax filing. Some people, such as individuals with a basic tax return, find that they can handle this on their own. As a business, even a sole proprietor, this isn’t a risk to take. With so many challenges, you need a tax professional to show you the way.
- Neglecting to review all your tax obligations. It’s easy to get so caught up with federal taxes that you overlook what’s required of your business on a state and local level. If you’re filing a business return for the first time, this is a mistake that could sneak up on you.
No matter how hard you try, it’s possible you could make one or more year-end tax mistakes. As frustrating as this may be, use it as a learning experience so you can avoid the same in the future.