As a result of the changes to the tax laws, many people who have been able to itemize their deductions in the past may now instead use the higher standard deduction starting with the the 2018 tax year. Many people were concerned that this change would reduce individuals’ willingness to donate to charity.
Savvy business owners and individuals understand that there is more to income tax than the yearly filing with various taxing authorities. Hand in hand with tax preparation, it is prudent to review the clients’ current year tax situation in order to ensure compliance with estimated tax requirements as well as to avoid underpayment penalties.
Businesses often operate in multiple states and while the income tax liability is often not significant it can add complexity when preparing the business tax return. It is important to determine what income is taxable to a state and what deductions can be allocated against that income.