Tax Tip Thursday

Mid-Year Review

Now that we’re part way through 2022, let’s talk about estimating your tax bill. This will be of particular interest to people who are self-employed, own a corporation, or have rental properties.

With COVID, many peoples’ income streams have changed dramatically. Lots of people started businesses, and it seems EVERYONE has an Airbnb now. With all these changes, everyone seems to be asking me to help them estimate their tax bill for next year.

I am sure you have heard the expression plan for the worst, hope for the best. It applies! I don’t know about you, but if I have a big tax bill coming, I would prefer to know about it six or eight months ahead of time so I can do something about it! That’s how you prepare for the worst with taxes.

What to Do

The process will be the same regardless of what situation you are in.

  1. Get Organized (capture all the financial information that could affect your taxes)
  2. Determine where you are today
    1. How much have you made to date? Includes salary, wages, revenues, dividends, bonuses, etc.
    2. What deductions do you have? Could be business, rental property, home offices, cars, and so on.
    3. How much have you paid in taxes to date?
  3. Take some time and estimate your earnings/income for the balance of the year
  4. Put it all together
  5. Prepare a high-level proforma tax return.

There are lots of variables and it will NOT be straightforward, so take your time. Or, if you want it done by the pros, come see us! We will be happy to help you figure all this out and make a plan to handle next tax season. We have had amazing success with many clients in the last few years!

What We Offer

Starting in August, we will be offering mid-year tax reviews to estimate your 2022 taxes that will be payable in April. We will have three customized packages available:

  1. Sole Proprietor Package
  2. Rental Income Property Package
  3. Corporation Package

This will be a great opportunity for you to save yourself some pain next April. Not only can we estimate your tax bill for you now, but we can possible provide you with some mitigation strategies to change the outcome! But you have to start early. If you leave this until February there won’t be much anybody can do to help you prepare!

Do yourself a favour and make a move on this while you still have time. Give us a call and make an appointment!

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.