February 15, 2022 | By: Jaylen Wallace |Taxes
While tax planning is an essential tool that allows you to keep track of profits and expenses, ensuring preparation for whatever tax liabilities you may have at the end of the year, it can also be a daunting process that requires time and effort. The best piece of advice that we can offer to simplify this process, while also making certain you’re not missing out on anything that could minimize that tax liability, is to get with a tax professional.
Now, you may think: why spend time and money to work with a tax planner when I could just do it myself? They will guide you throughout the year in keeping track of your profits, expenses, and liabilities so that when tax season comes, you’ll know where you stand. It’s kind of like feeding a calf. You can either feed it and pay now, or don’t feed it and pay more later. So, while it costs to work with a tax professional, it allows you to save time in the long run.
The number one thing in agricultural tax planning is pre-paids. In short, these are payments made during the tax year for supplies that will be used next year. This adds more expenses up against your costs, which could allow you to save on your taxes depending on the year you had. A general rule of thumb to go by is if you had a profitable year with little purchases or expenses, you’re going to have a sizable tax liability. If things aren’t going so well, you’ll more than likely want to wait on those purchases. Purchasing equipment or making capital improvements is also a great way to catch your depreciation expense as well. When we talk about depreciation, we’re referring to the allocation of the cost of an asset over its useful life, which is another key method in tax planning. These are all things you will work with your tax planner on.
With all this said, it’s important to work with someone that is knowledgeable about your work depreciation and understands the business you’re in. We recommend finding a tax planner with real insight into your operation because they will be the ones to have the knowledge that will have the greatest effect on decreasing your tax liabilities. Working with a professional who has a good understanding of these things is crucial.
We want to encourage our customers to be proactive and take the extra steps so that whenever it’s time to file taxes, you can rest in the security of knowing what to expect and having a long-term plan. We know that tax planning can be intimidating.
We want to stress that the more you meet with a tax professional, the easier things get. Although we ourselves are not tax professionals, we are here to help and can guide you in finding a good CPA for your business.
Frequently Asked Questions
Property taxes in Texas are calculated using a percentage of your home’s appraised taxable value. For example, if your tax rate is 1.5% and your home’s value is $300,000, then you will owe $4,500 in property taxes.
Property tax rates in Texas vary by county. The average effective property tax rate in Texas is 1.69%, which is the seventh-highest property tax rate in the United States. The typical Texas homeowner pays $3,400 annually in property taxes.