When it comes to taxes one of the biggest challenges for a small business is navigating the complex landscape of what taxes are owed where. One of the top complaints that small business owners had against their accountants in the 2015 Small Business Accounting Report, was a lack of guidance. With 70% of small businesses outsourcing their tax preparation to their accountant to handle their tax needs it is important that owners maintain an understanding of the basic landscape so that you can make sure your accountant is doing their job properly and so you can prepare effectively for tax season.
Key goals for combating the anxiety of tax season are staying organized, maximizing your deductions and reducing the possibility of an audit. Regardless of the state your company is currently in, you could end up saving on your taxes if you make the right moves now.
According to the Internal Revenue Service, 20-25% of all Americans wait until the last two weeks before the deadline to prepare their returns. Here are a few tips for you last minute filers:
- Make IRA payments up until 4/15. You can still deduct them for 2014 – make sure the payment is in before you file your returns.
- Make sure all payments are in, even if you can’t file on time. The IRS wants your money first and will wait on your forms. You can extend until 9/15. Use form 4868 which you can get from the IRS.gov.
- Work out a payment plan. If you don’t think you can pay your taxes due call the IRS and work out a plan.
- Check your math. Make sure all numbers agree to your forms (W-2, 1099, etc.) – stupid mistakes will cost you money.
- Adjust your withholdings for next year. A big refund expected is NOT a good thing…the IRS doesn’t pay interest!
- Update Contractor Information. Obtain an updated W-9 tax ID form when it is time to begin filing your taxes: Verify the names and addresses and note the total you paid each contractor.
- Use section 179 correctly. This little jewel in the tax code allows small and medium-sized businesses to expense capital purchases in the year of purchase rather than depreciating over the years.
- Research tax credits and sell stock. A new law allows for certain qualified stock to be sold, or some small businesses can skip the tax entirely. The stock must be acquired after September 27, 2010 and before January 1, 2015. Furthermore, none of the excluded gain is subject to the alternative minimum tax.
- Employer Shared Responsibility Provisions. According to the IRS, “if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges, also called a Health Insurance Marketplace (Marketplace).” The payment will be calculated across your entire payroll if the minimum level of coverage isn’t offered to employees.
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