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Tax Season is Over… But Don’t Get Lazy with Tax Planning

Are you breathing a little easier to know that you made it through the business tax season in 2018? Many business owners feel the stress and pressure during the first few months of the year due to tax paperwork that needs to be distributed and filed. Plus, the income tax payments and quarterly payments can add up during this time of year. Now that you have made it through tax season, don’t let your guard down by neglecting tax planning for the rest of the year.

Working with Your Accounting Team All Year Long

Your accountant helped you get through tax season, and you should continue leaning on the support of the accounting team for financial systems and decisions that need to be made in the future. Accounting services are more than just filing tax paperwork as needed. As a business owner, you have a depth of information and support that is available to ensure the forward progress of your company.

How often should you talk to your accountant? It depends on the size of your business and the services that are needed. But, it is important to know that your accountant is always looking for ways to support your business efforts, helping with the future success that is possible.

Not only will these accounting services help with tax filing, but tax strategy can also be suggested to ensure that you are ready for taxes next year. If you want to optimize your deductions to minimize your tax burden, then you need to be strategic with your bookkeeping and spending during every month of the year.

If your accounting team doesn’t offer this ongoing support, then it might be time to find an accounting service that specializes in small businesses. Your business will have the highest chance of success if you are working with a company that isn’t just punching the clock during tax season. Instead, your accounting team should maintain a conversation with you on an ongoing basis. You can get help with bookkeeping, payroll, quarterly filings, tax planning, and more.

It’s Never the Wrong Time of Year to Think about Taxes

One of the biggest mistakes that you can make is pushing your tax strategy to the back burner for most of the year. Too often, business owners let the financial paperwork and receipts pile up. Then, it is a stressful rush to complete the calculations and paperwork that are needed at tax time.

Instead of procrastinating your financial work, it is essential that you make it a priority to keep up with these details on a weekly and monthly basis. For example, receipts should always be filed and labeled if they can be used as tax write-offs. Proper categorization makes it easy to calculate your deductions when it is time to file tax paperwork in the future.

Other essential tax planning tasks will depend on the complexity and size of your business. So, you should talk to your accountant to get the personal recommendations that are needed for your company.

Availability of Your Accountant

Keep in mind that your accountant is likely facing a huge workload during tax season. As a result, they probably don’t have a lot of time to discuss tax strategy with you a few weeks before the tax filing deadline. If you wait until the busiest time of the tax season, then your options might be limited to have the conversations that are needed for your tax strategy.

The best thing that you can do is enlist the help of an accounting team right now. Then, you can implement a good tax plan so that you are ready for anything that might come your way through the rest of the year. Most accountants have time available right now to have detailed conversations about your business. You will receive the undivided attention that you deserve to ensure that your tax strategy is designed to be a perfect fit for your company.

Tax Forms that Need to be Filed Throughout the Year

Are you a new business owner? Then you might not realize that there are tax forms that need to be filed throughout the year. Most people know about annual tax filings, but they aren’t aware of quarterly payments and other paperwork that might need to be addressed.

The paperwork varies depending on the structure of your company. Companies with employees need to pay employment taxes and file paperwork on certain dates. Owners of LLCs need to file separate tax paperwork for the business and the company. Sole proprietors can often keep all of the tax filings under the same forms.

Additionally, there might be various paperwork requirements for state and local tax requirements. Your accountant can help you assess both federal and state level paperwork and taxes that need to be addressed.

Do You Qualify for Any Tax Credits?

Tax credits might be a good option for your strategy. Some small businesses can qualify for tax credits, helping to offset the tax burden that is carried each year. Keep in mind that these tax credits can change from year to year. So, you need to lean on the expertise of your accounting team to ensure that you are staying current with the credits that are used.

In many situations, basic tax credit information is programmed into tax preparation software programs. But, strategy and planning are required if you are going to take advantage of these credits. Thousands of credit opportunities are available on federal and state tax levels. All of the credits have unique requirements, and your accountant can help you assess how your business needs to meet the requirements.

Go Digital with Your Accounting System

Have you delayed the change to move to a digital accounting system? If you are dragging your feet with the changes, then right now can be a great opportunity to implement the new system. Going digital will give you the opportunity to improve your tax strategy. Additionally, you can enlist the services of the best accounting teams since you aren’t limited by location. Digital accounting makes it possible to share your accounting records with an online team. You can also access these records from anywhere in the world.

Online software programs can help with essential tax requirements, such as tracking employment taxes and sales tax. Then, you can run reports to see how much money needs to be paid to the government. The right system can also be used to help with payroll, ensuring that you are withholding the right amount from employee’s paychecks and also making the employer contributions that are needed.

These online tax systems are secure and effective. You have control to grant access to the tax professionals that are helping your company. Lean on the expertise of a good accounting team so that you can avoid manual calculations and busy work in the future.

How Can Tax Planning Help Your Company?

Your accountant might make suggestions that will assist with the financial goals for your company. These are some of the strategies that can be built into your tax plan:

  • Decreasing the taxable income
  • Reducing your tax rate
  • Managing the schedule of tax payments
  • Identifying potential tax credits
  • Avoiding common accounting mistakes

Your accounting team will look at all of the options to manage the taxes that you are paying each year. In some situations, it might make sense to restructure your company or change the way the transactions are handled to provide the best outcome. Your accountant can analyze your situation and see if there are any areas where you might be missing out on tax benefits. As a business owner, it makes sense to maximize your tax benefits as much as possible.

Timing of Purchases and Deals

Remember that the timing of your purchases can impact your tax strategy as well. For example, if you have a low-income year followed by a high-profit year, then you might choose to purchase expensive equipment or furniture in the higher year to reduce tax burden that year. You need to evaluate where you will fall in the tax brackets to see if it makes sense to adjust your spending.

Sometimes, a purchase that you are considering in December can be pushed to January if you anticipate that you will need the write-offs more next year. So, you need to consider the cash flow and potential tax burdens, then look at the timing of the transactions for the best results in the future.

Our team of experts at Easier Accounting is always working hard to ensure optimal results for your company. We specialize in small business accounting services, giving you the peace of mind to know that you are working with a team that understands your industry. If you need tax planning or other accounting services, then we invite you to contact us for more information. We offer a variety of solutions, ensuring that the services are catered based on the needs of your company. Call the leading team of outsourced accountants if you are ready for a new tax strategy for your company: (888) 620-0770

Surviving Tax Season: A Guide for Small Business Owners

We are nearing the end of tax season, which has some small business owners scrambling to finish the details before the upcoming deadline. Tax season is a necessary part of business ownership, but it can be a stressful experience if you don’t have the paperwork ready for your accountant. Whether you are relieved to be done with your tax filing or you are working hard to wrap up the details, there are a few things that you can do to survive this stressful time of year.

Why is Tax Season So Stressful?

Many business owners spend hours sorting through paperwork, trying to make sense of the transactions for the year. It is common for bookkeeping and accounting practices to get pushed to the backburner, resulting in a situation where there isn’t an organized log of the receipts and invoices. Not only do you need to sort through the paperwork, but everything needs to be categorized and recorded. The paperwork needs to be kept on file in case documentation needs to be provided for an audit in the future.

Stress often comes from the long hours of sorting through transactions and trying to remember everything that needs to be documented. At the same time, it is common to feel stress about the tax bills that need to be paid.

During this time of year, you need to keep up with the regular business activities and juggle the extra work that is needed for tax preparation at the same time. Stress levels go up because of the extra time that is needed to get everything done before the looming deadline.

Managing Your Stress During Tax Season

Just because it is a stressful time of year, doesn’t mean that you need to bear the burden without managing your stress. Here are a few tips to help you manage tax season:

  1. Be Aware of the Deadlines: Knowing the deadlines will ensure that you don’t miss the most important days of the tax season. If you miss a deadline, then your stress levels might go up even more because of the extra fees and interest costs that will need to be paid for a late filing. The normal income tax filing deadline is April 15th. But, this year the 15th falls on a weekend, which means that the IRS changed the deadline to make it a business day. In 2018, the final day for tax filing is April 17th.
  2. Create a Tax Schedule: In addition to the tax filing date in April, there are other deadlines throughout the year for quarterly taxes, Medicare, Social Security, and more. Tax season is a good time of year to assess your schedule and make sure that you are staying ahead of everything else. If you miss these other deadlines during the year, then your stress levels will go up when the work is being done during tax season you and find out that there are extra payments that need to be met. Right now is the perfect opportunity to create a schedule that you can follow through the rest of the year. Your accountant will provide recommendations for the best schedule that will meet your needs.
  3. Make it a Priority: As you are working through the regular activities of running a business, it is easy to let your tax preparations fall to the bottom of the to-do list. When you are dealing with employees and customers in face-to-face conversations, the busy work often gets pushed aside. Taxes should be a high priority so that you don’t miss the deadline. So, you should set aside time in your schedule to focus on the tax preparations that are needed. Even if you have a good accounting team to help, there are still a few things that you need to do to prepare the paperwork for the filing. Your accountant will be waiting for you to supply the necessary information.
  4. Provide Organized Information: It’s not going to work if you try to hand your accountant a shoebox full of receipts. When you have a year of transactions, you need to be able to categorize the spending and break everything down so that the accountant can understand the numbers. Organizing the information is essential to ensure that you don’t miss important details that need to be included in the tax filing. The easiest method is to keep all of your tax information in one location, such as an online software system that is used throughout the year to track your spending. In addition to providing the details for your accountant, you also need to maintain these records in case the IRS asks for additional information.
  5. Separate Business and Personal Transactions: It is easy to let the business and personal transactions get mixed together, especially when you are starting a home-based business. The IRS is strict about the mingling of business and personal transactions. If you don’t already have a good strategy, right now is the time to separate your business accounts and personal accounts. Set up a business credit card so that you can keep business-related expenses separate from your personal
  6. Look for More Deductibles: Are you feeling the stress of a high tax bill this year? If you are looking for ways to come up with the cash to pay the bill, then you might talk to your accounting team to identify additional deductibles that can be calculated into your return. Some of the hidden deductibles can make a big difference to the amount of money that you need to pay. For example, you can write off expenses for new computer equipment, business travel, furniture, meals, insurance costs, employee expenses and more. Don’t overlook a penny that was spent on business activities. If the money was spent to support your business efforts, then it can be counted as a deductible on your tax return. Talk to your accounting team if you have questions about whether specific expenses qualify as tax write-offs.
  7. Leverage Online Tools: Don’t make the mistake of trying to calculate your business expenses with a hand-written ledger. There are many tools available that can be used to calculate your income and expenses. You should talk to your accountant for recommendations about the right tools that should be used for your industry. It might be too late to implement these tools for the current tax filing. But, you shouldn’t overlook the benefits of using software tools to help you prepare for next year.
  8. Talk to an Accountant: Whether you have a home-based business or a start-up with a physical location, it can be a big mistake to attempt a DIY tax filing. Some people are tempted to file taxes without professional assistance because they are looking for ways to save money. A tax preparation fee might feel unnecessary. But, the truth is that this service can be an essential way to help you avoid problems in the future. You will reduce your stress levels by passing the bulk of the work to a professional team, allowing you to focus on other important business tasks instead. Plus, you can trust in their expertise to ensure that you don’t miss potential write-offs. Many business owners find that tax preparation services are a great investment because of the reduced tax burden that needs to be paid.

Staying Ahead of Tax Preparations

Even though you can’t turn back the clock to change how you prepared for taxes this year, you can set a few goals to be better prepared next year. Right now is the time to find the motivation to make a change. Consider the stress levels that you are experiencing during this tax season. Then, imagine what it will be like to file taxes next year if you already have the information organized and ready for your accounting team.

You don’t have to implement this system without assistance. Hiring a year-long bookkeeping and accounting service is one of the best investments that you can make for your company. You should be talking to your accountant throughout the year, instead of waiting for tax time to have a few brief conversations. Consistent support from a financial professional is one of the most effective ways that you can stay ahead of your business finances and minimize the stress that you experience when it is time to file your taxes each year.

Ongoing accounting services give you the insights and tools that are needed to maximize your deductions. These transactions are tracked each day, week, and month. Then, you can run a few easy reports when it is time to calculate the numbers for your tax filing.

Do you have questions about filing business taxes? Do you need help with your filing? Our team at Easier Accounting is always here to assist. We specialize in small business accounting, giving you access to the expertise that you need to support your business efforts. Call to learn more about the ways that we can help throughout the year: (888) 620-0770