1. Meet with your Tax Accountant
Why wait until the busy tax season to meet with your tax advisor? Make a mid-year appointment when you’ll both have more time to discuss your financials. Most importantly, you’ll still have plenty of time to act on his or her suggestions within 2016. 2. Review your estimated tax payments for 2016 Now that we’ve hit the midway point, review what your business has made year to date and your forecast for the rest of the year. Then assess your estimated tax payments to avoid underpayment penalties or overpayments (you could be doing more with that money). Adjust your final two estimated tax payments for 2016 as needed. 3. Re-evaluate your business entity Many small businesses start out as sole proprietorships or partnerships, but then eventually transition to another entity. For example, if your business is not incorporated, you may want to consider incorporating to shelter you from some financial risk and possibly save money on taxes. Sometimes an entity is formed with one income target in mind, and you might need to reconsider the entity for a different income level. Failing to adjust your business entity for your revenue can be a costly mistake. Discuss the different legal entities with your accountant, so you can determine the right entity for your situation and the right time to make the change. 4. Review your salary and distribution amounts in an S Corporation If your business is structured and taxed as an S Corporation, make sure your salary and distribution payments are optimal. Too often, S Corp owners don’t properly balance the amount the S Corporation pays them as salary vs. distribution. The result can be either higher taxes or an increased audit risk. 5. Take charge of your recordkeeping To make the most of your business tax deductions, you’ll need accurate, comprehensive records. If you haven’t been keeping track of your business expenses, get caught up now. And if you find yourself struggling with this administrative task, look for a new solution ? whether it’s offloading the task to someone else, investing in a technology solution (like a receipt scanner), or dedicating 30 minutes each week to expense tracking. You’ll be grateful come tax time. 6. Plan equipment purchases Take advantage of a first-year expense write-off for equipment placed in service by the end of the year. Business owners and self-employed individuals are allowed a first-year depreciation deduction of 100% of the cost of qualifying property acquired and put in service. 7. Plan for retirement If you haven’t done so already, take time to set up a retirement plan or reassess your contributions. Contributing to an IRA, Keogh, simplified employee pension (SEP), or other retirement plan is an essential way to plan for your future and reduce your taxable income. The specific rules, contribution limits, and deadlines vary by plan. Make an appointment with your accountant to discuss the best retirement option for your business. mashable.com/2012/05/01/tips-small-business-finances/#tmsfM7T6N5qx
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February 2018
CategoriesDisclaimerPlease note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by On Call Business Support unless a client service agreement is in place. |