Make These Resolutions Count

Americans are good at a lot of things, and great at a few. But there’s one area where we’re the undisputed heavyweight champions of the world, and that’s making empty year-end promises to do something better in the year ahead. Right now, millions of fellow citizens are resolving to quit smoking, hop back onto the diet carousel, start exercising, or disconnect from their cell phone. Most of those resolutions will lie smoldering in the dust by the time Groundhog Day rolls around, which is appropriate because most of the people repeat those same resolutions, year after year after year. (Also, isn’t it awesome how most Americans hear the word “Groundhog Day” and think of Bill Murray before Punxsutawney Phil?)

This year, may we suggest three new resolutions to help you save some nice coin on your taxes?

First, pay attention. Most Americans think of the tax system as an impenetrable black box. Compile a bunch of intimidating government forms with names like “W-2” and “1099-DIV,” hand them to us and cross your fingers that we can work some sort of to magic, and sign Form 8879 to let us transmit the finished forms to the IRS. Some clients don’t even bother to read through their actual returns – it’s just too painful.

But taxes aren’t a black box, and there really is a method lurking underneath all that madness. The tax code is a series of red lights where you have to stop and pay tax and green lights where you can go without paying. Most tax pros do a perfectly good job with the red lights. But they don’t have the time, the training, or the proactive mindset to help you find the green lights to pay less. The more you understand how those green lights work, the more we can help you take advantage of them.

So pay attention to what you spend, especially when it comes to your business, and help us help you where it really counts.

Second, ask for permission, not forgiveness. We know, this goes against every grain of our American corner-cutting fiber. But sometimes you really do have to do your homework before you act.

Are you selling anything expensive soon? A business, an appreciated property, or even depreciated business equipment? We’ve got a dozen different ways to help you pay less tax on that transaction, if you come to us before you sell. But if you come to us even a day after you close, that list narrows. And if you don’t come to us until April 15, there’s usually nothing we can do at all. Sometimes, when you wait to ask for forgiveness, it doesn’t come.

Third, don’t procrastinate! Twelve months sounds like a long time to get your affairs in order. But as the clock ticks down to midnight on December 31, there’s less and less time to plan or act. Don’t be that guy who calls on December 20 to say, “My income went up this year and now I’m gonna get socked with taxes, what do I do?” There are lots of things we can do to help you pay less, either today, tomorrow, or over time. We can even help you save taxes when you’re dead. (One of the great things about Form 1041, “U.S. Income Tax Return for Estates and Trusts,” is that just because a client dies doesn’t mean we have to stop billing them.) But we can’t do any of that if there isn’t time.

2024 is here! We hope you and your family are poised for a great year, full of joy and success, both personally and financially. These three resolutions can help you keep more of that success, wherever you find it!

Let us help you with your resolutions to build your net worth via tax and financial planning. Call (562) 281-1040.