So as tax season winds up, it’s worth thinking about what you can do to make sure you’re doing everything you can to avoid leaving money on the table over the next year.
Spoor Bunch Franz has been working with business owners in the Tampa Bay area for decades, and based on that experience, here are 7 tax tips for business owners.
- Classify your business correctly. What’s the difference between an S Corporation and a C Corporation? What’s a Limited Liability Partnership? Work with your attorney and accountant to determine the right way to classify your business, as this can affect the way your taxes are calculated.
- Work with your accountant on your business plan. An experienced accounting firm knows the pitfalls businesses can fall into and will likely have ideas on how you can save money. You should be able to rely on your accountant as a trusted advisor.
- Manage payroll effectively. Make sure the firm you hire to manage your payroll is reputable and experienced. The IRS checks whether payroll taxes are being paid, and your payroll management firm should be remitting payroll taxes for the company so that you don’t have to worry about this.
- Don’t mix your business expenses with your personal expenses. If the IRS audits your business, they will see that your personal expenses are mixed in with your business expenses, and they may want to poke around in your personal accounts. We recommend completely separating your credit cards and accounts.
- Create a calendar of deadlines. For individuals, we think of the tax deadline as April 15. But for businesses, it’s more complicated. Individual forms for special tax credits may have their own filing deadlines, and you may miss out on these incentives if you neglect those.
- Start a retirement plan for yourself and your staff. This is a win-win. Your employees get to save money for retirement, you get to incentivize them to stay with your company longer, and you may be eligible for tax credits or deductions, depending on the plan you choose and other facets of your business.
- Start preparing for next year as soon as possible. Review with your team and your CPA what worked and what didn’t this past year. How did you manage receipts? Did you make all your deadlines? Was there equipment you could have purchased but ran out of time? If you take time to reflect on how the year went and get organized now, next year will be less stressful.
If you have any questions about your business taxes, reach out to us at www.sbfcpa.com.