Tax checkups you can do any time of year
For many business owners, the first quarter of the year may be the climax of tax prep activities. However, you should not only be thinking about your taxes right before the April 15 deadline. After all, otherwise innocuous day-to-day decisions can have a significant impact on your overall tax obligations. This implies that you need to plan throughout the year to make sure you are ready.
A small business owner can utilize their taxes to create a better financial outcome for their company. This is mostly achievable by strategically planning for the tax season throughout the year. When preparing to file your annual tax returns, keep yourself consistently updated with purchases and other financial decisions. Here are a few ways to ensure you are always on top of your taxes.
Calculate your projected payroll taxes
Calculating the expected payroll taxes helps business owners get into viable payment agreements with the IRS. For instance, businesses that experience trouble while paying their payroll taxes may be able to take advantage of an IRS installment plan, which is designed to restructure costs to better fit the financial capabilities of a business entity or individual. A taxpayer may be eligible for an agreed upon payment plan if they owe$25,000 or less in combined tax, penalties and interest upon completion of all required returns. Therefore, a business owner must come up with the most favorable tax projections. In the end, it will prove helpful in deciding the payment plan to propose to the IRS.
Conduct a compliance checkup
Note, the IRS, the U.S. Department of Labor and the Affordable Care Act all have rules regarding independent contractors. For a business owner, it is essential to ensure that your firm or organizational operations comply with the existing regulations. This helps to avoid costly penalties and fees that may come because of noncompliance. Conducting routine compliance checkups will ensure your business is fully compliant to national regulations. Ideally, this checkup would be completed by an accurate, honest outside service provider. In this case, the service provider will even give you advice on how to address the issues that arise from the checkup. Services like Mount Bonnell Advisors offer cost-effective, resources to remedy possible concerns regarding compliance checkups.
Update ownership records
Ownership records and employment practices need to be up-to-date. Authorities are tasked with making sure new businesses are in full compliance with national guidelines, so make their job easier by updating your records in a timely manner. Therefore, a business owner should plan regular reviews of documents and applicable rules. Make the necessary changes when there is any kind of change in upper or middle management. For instance, there should be a change in ownership records if there is a new director employed. The ownership records should always reflect the current administrative staff of the business.
Keep up with your state’s tax issues
Some states obtain loans from the federal government to pay off liabilities associated with unemployment benefits. If a state has obtained but not repaid those loans, there may be a decrease in the credit amount against the Federal Unemployment Tax Act tax rate. Meaning, employers in certain states will have to pay more. These states include Arizona, Arkansas, California, Connecticut, Delaware, Indiana, Kentucky, New York, North Carolina, Ohio, Rhode Island and South Carolina. U.S. territory the U.S. Virgin Islands is also subject to the FUTA tax rate.
Review non-competes and confidentiality agreements
This is especially important for the contracts written by attorneys outside your home state or state of operation. This will help to avoid possible theft of critical business and even personal assets in case of a sole trader. As part of this, reassessing document-retention policies to make sure they balance exposure with business needs is important. Reviewing agreements will help you avoid tax issues as well as possible litigations.
Develop a succession planning
Take a moment and think about what will happen to your business if you had an unexpected health crisis or accident. Business owners should discuss and determine what actions they would take to ensure the firm operations continue. Besides, there are tax benefits to succession planning. Your attorney and your accountant should be notified about succession plans, so they can offer advice on the best options for both you and your business.
If business owners get their information together well ahead of time, they may significantly improve the chances of filing a complete and accurate return. At Mount Bonnell Advisors, we believe in being in full compliance with the law. Essentially, we make sure you conduct the proper checkups and that they are in line with IRS regulations.
Moreover, a well-informed business owner should know that preliminary preparation and planning are critical components to success. Instead of merely checking off tax details from a list of things to do at the end of the year, get proper information from the experts. For more information visit Mount Bonnell Advisors.
