March 31, 2014
With the business tax return deadline behind us, this is an ideal time to think about giving your business a little post-tax season tune-up with the intention of making next tax year easier and improving your financial situation. Here are a few key areas to consider analyzing now that your business taxes are filed:
Day-to-day accounting. With the rush of preparing for tax season, on top of the regular hectic pace of running your business, it can be tough to keep your financial records up-to-date. If you fell behind over the past several months, now is the time to get caught up, before the lag in your record keeping hinders your business.
Start by reconciling your business accounts, making sure that your balances are accurate, and that you are current on your bank deposits and bill payments. By investing some time to make sure your day-to-day accounting is on track, you will have the data you need to evaluate important metrics including your profit and loss statements, annual financial comparisons, and cash flow.
Your current financial and tax situation. In just a few short months, it will be time for a mid-year review to ensure your business is on track financially. Now is an ideal time to schedule a mid-year planning session with our firm to discuss your current business financials and your operational plans for the rest of the year. You should also plan to address any new business or personal developments that may affect your tax liability in the next year so we can work with you to lower your tax obligations.
Retirement plans. If you do not already have a retirement plan, consider opening a retirement account to defer income taxes and provide future income, beyond Social Security benefits. Our trusted advisors can help you select the right retirement plan for you, and, if you desire, help you set up a retirement plan for your employees as well.
Adjust estimated tax payments. If you had a large tax liability or a large refund this year, you may want to revisit your estimated tax payments and adjust your calculations to avoid owing too much at the end of the year, or leaving your business cash-poor due to overpayment of taxes. As the year progresses, monitor your bottom line and adjust your tax estimates accordingly.
Employee benefits. If your business has employees, you may wish to consider providing them with enhanced fringe benefits, while your business reaps tax savings as well. Adding pre-tax benefits such as health insurance, group term life insurance, and child care subsidies to an employee’s pay, saves your business money because you are not required to pay the employer’s share of payroll taxes on these forms of reimbursement.
While you are probably glad to have your business taxes filed for this year, it can be extremely beneficial to fine-tune your business finances and tax situation now, rather than waiting to see where you stand at the end of the year. By being proactive, you can benefit from valuable tax savings and opportunities to improve the accuracy of the financial information that you use to manage your business. Please contact our office with any questions you may have—we are here to help you.
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The April 15 filing deadline is rapidly approaching, so we encourage you to send us your tax documentation as soon as possible to expedite the filing process. Here are four important reasons why you should file your return sooner rather than later:
This tax season is an important one for many business owners because it’s the first that will be impacted by the Tax Cuts and Jobs Act (TCJA). How big of an impact is dependent on your unique situation. We’ve compiled this short list of provisions that may affect the business community: