There’s nothing worse than finding out there are valuable tax deductions and credits you could have claimed – if only your income was a little lower. “By doing a year-end projection now, you might be able to reduce your income before the end of the year in order to qualify for certain tax breaks”, explains Dennis Nelson, Partner.
Many tax breaks are only available only to people with an adjusted gross income under a certain amount. Let’s say you could qualify for some of these valuable tax deductions and credits — but your income is a little too high.
It may make sense to lower it before the end of the year.
The first step in this process is to make a projection of your income for next year, as well as your expected deductions and tax credits. With the projection in hand, we can see how close you are to claiming various tax breaks — and whether or not you should take some aggressive steps to lower your adjusted gross income for the year.
This is a smart move for small business owners who have some control over when they receive income.