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Mid-Year Tax Planning – Time to Reset Your Thinking?

By TaxWealth -

As we hit the mid-point of 2017, we have six months of experience under our business belts, and six more months left to make the most of our yearly plan. Many of you may have adjusted your original business plan for the year considering unexpected events, good or bad. Perhaps you may also be contemplating some business restructuring to take advantage of new market conditions.

Regardless of your experience so far, you likely have a much clearer view about how 2017 is going to shake out fiscally for you. Consequently, now is the time to take a mid-year time-out to assess how you stand, and what moves you need to make to restore operational order to your enterprise and ensure you end up in the black on December 31!

  • Make an appointment with yourself to review performance, with your data in front of you and your mobile phone shut off.
  • Sit down with your managers to assess progress, spot performance gaps and lay in plans to fill the gaps and improve results.
    • When you do meet, take to heart some wisdom offered by Zig Ziglar: “Research indicates that workers have three prime needs: Interesting work, recognition for doing a good job, and being let in on things that are going on in the company.”
    • Remember, too, Sam Walton’s advice: “Appreciate everything your associates do for the business. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free and worth a fortune.”
  • Meet with your financial advisors (business accountant, financial advisor, banker and tax planner) to review results-to-date, and ask them for advice on any moves you may want—or need—to make during the next six months.

The biggest financial planning factors you should evaluate at the year’s midpoint are:

Cash Flow and Budgeting: Are you on track to cover your forecasted expenses? Do you need to arrange more credit, or are you covered based on the year-to-date performance? How are prices holding on your inputs? Are customers paying on time? How can we improve these metrics?

Sales and Inventory: Did you meet your sales forecast for the first six months? What is the trend for the rest of the year? Is inventory sufficient to cover expected sales?

Purchasing: How reliable are your current suppliers? Does your Plan B  for each need reviving?

Tax Implications: Based on your forecasted profit, what moves can you make before year end to minimize the tax bill for the year? Some areas to review:

  • Are you using the right depreciation schedules for each asset?
  • Are you properly allocating expenses across your asset portfolio (every business has an asset portfolio!)
  • Do you plan to sell any assets? Explore how best to structure such a sale. There are multiple tax planning approaches you could apply to reduce taxes and increase the profits to your bottom-line.
  • Based on your forecasted net profit, what timing makes the most sense for any selling or buying of assets?
  • How best can you use any tax-loss carryforwards to offset income?
  • Consider getting a Second Opinion Tax Diagnosis done on your last three tax returns to identify missed planning opportunities and taxes that you may unnecessarily be paying. You may be overlooking a great opportunity to supplement your cash flow this year as a result.

Lastly, for many industries, Summer quiets down as customers take time off. July gives you a great chance to take advantage of this “down time” to work on – not in – your business. Sit down and think through the questions we have shared in this article, and others these questions spark. You have plenty of time to act on any decisions you make well before year-end. And if you need the help of financial, accounting or tax advisors, you have the time to find those that best fit your needs and style! 

Is there any way I can be of help with your mid-year review?

About the Author…

Bruce Jones - Tax Planner

Bruce Jones got his start in financial services in 1970 and has taught the subjects of tax management and financial strategy planning since 1974.  He is President and CEO of TaxWealth®, a tax analysis and solutions research firm which provides comprehensive income, capital gains and estate tax remedies for owners of real estate, privately-owned businesses and other capital assets. He also supports CPAs, attorneys, financial advisors and real estate and business brokerage professionals, helping to solve their clients’ tax problems.

TaxWealth works with clients and professional partners nationally from its home office in Newport Beach, California. Visit their web site at  or call Mr. Jones toll-free at (800) 300-4723 to discuss your tax concerns.


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