Consumer optimism is high, thanks in part to recent tax cuts for businesses and individuals as part of tax reform – the Tax Cuts and Jobs Act – signed into law in December 2017 and affecting returns for the tax year 2018 (January-December 2018).
While your CPA or accountant will probably send you an email or letter explaining the basics of tax reform and asking to set up a meeting, you can be proactive and better prepared in order to make the meeting go much smoother.
Here are four key areas you’ll want to address:
1. Document your goals
Everyone has dreams and goals for their career, family, education, savings, retirement and lifestyle. Understand what is important to you and document it. If you’re in business with your spouse or partner, are you on the same page? If not, what goals does that person have that are different? Once you understand your goals, you’ll be better positioned for future growth.
2. Wealth building
Retirement plans and matching contributions are the most common wealth-building benefits for you and your employees, and many plans defer taxable income and reduce taxes. Confirm you and your staff, if applicable, are taking advantage of employer matching contributions and contributing as much as possible to minimize taxes and maximize long-term savings.
3. Wellness
Health insurance and medical expenses are among your largest expenditures, but they are also among the biggest opportunities to avoid taxation of the income to pay for them. For example, quantify the total family insurance expense and confirm the expenses are being paid with pre-tax dollars.
Determine if out-of-pocket expenses could be covered by other benefits such as Health Savings Accounts (HSAs) and flexible spending accounts. Inquire about disability insurance, life insurance, and athletic facilities or gym membership reimbursement, which all have tax-savings benefits. Don’t forget to ask about non-cash benefits that often impact the quality of life, such as flexible work schedules, work from home and paid vacation days that can have a significant impact on quality of life.
4. Employer-paid expenses
Finally, review other employer-paid expenses, including dependent care reimbursements, adoption expenses, tuition reimbursements, a company car, cell phone or other expenses. These may be opportunities to pay for expenses with pre-tax dollars.
To learn more, check out this guide: Everything a New Business Owner Needs to Know About Taxes.
This article originally appeared on the Quickbooks Resource Center and was syndicated by MediaFeed.org.
Featured Image Credit: Depositphotos.
