How to Avoid a Big Tax Bill at the End of the Year

If mid-April usually comes with a hefty tax bill to pay, it is time to consider better options for reducing this drain to your bank account. Effective tax and accounting strategies can help minimize your tax obligations and make it easier to manage the cost of your taxes. Knowing the options available and having a solid financial plan can help minimize your tax liability and make paying your taxes more manageable for 2018.

Uncovering Deductions and Credits

One way to reduce your tax bill is by reducing the amount of taxes you owe. The U.S. tax code is extensive, and unless you are an accountant or tax preparer, you may not know about all the different deductions and tax credits available to you. The new tax plan for 2018 will impact your taxes but knowing how to best make it work to your advantage takes financial planning.

Instead of waiting until the end of the year to worry about your taxes,  it is better to put together a financial plan for 2018. While there is little you can do about the size of your tax bill due April 17th this year, meeting with one of our tax experts at MMKR after the April 17th tax deadline can help you determine the best way to reduce your tax bill.

Spreading Out Your Tax Bill

Another way to make your tax bill more manageable is to break down your tax payments, spreading them out throughout the year. If you are employed, increasing the taxes removed from your paychecks can make your tax burden easier to bear at the end of the year. Just fill out a new Form W-4 for your employer.  Another option is estimated tax payments, made quarterly directly to the IRS and state department of revenue to pay your taxes in four increments instead of one large payment in April.

Professional Tax Advice in Minneapolis

At MMKR, we offer professional accounting and tax services for individuals and businesses at our office in Minneapolis. Not only can we help you with your 2017 tax return, we can assist you in reducing your tax debt and end-of-year payments for 2018. Contact our office to schedule a consultation with one of our tax or accounting professionals to help avoid a big tax bill for 2018.