Autumn. The leaves are turning, the air is getting cooler, and pumpkin lattes are in every cafe in sight. The year is starting to wind down and you might be feeling behind on your small business tax preparation. As the end of year approaches, it’s important to get caught up with all of your finances so you can properly assess your financial situation while there is still time to make purchases before the end of the tax year if that’s what’s necessary. If you haven’t been preparing as you go, this is a great time to take an hour each week to catch up. You’ll be able to tally your expense reports or review receipts and modify records. You not only want to be prepared to submit your taxes but also capitalize on deductions. Now is the time to implement strategies that will ensure your small business is in a secure place for the upcoming tax season.
Reviewing this year’s payroll may be easier to do before the end of the year than at the start of the new year. Overlapping end-of-year payroll with the new-year payroll could result in confusion. Ensure you are gathering the correct information for W-2 forms and taxable fringe benefits. If you plan to give your employees end-of-year bonuses, do so by year-end so that they are included in your employees’ income for that year. Quarter four (Q4) is also a great time to verify all of your benefits and employee payroll information is correct. It is important to detail out your payroll to avoid penalties for late, incorrect, or incomplete submissions.
Plunge into Profitability
When you have your finances spread across your desk, it’s a great time to review year-to-date profitability. Compare your data to determine how your business is doing this year compared to last year. Measure your profits by analyzing your performance data, for example, are your sales meeting your requirements to break even or performing above profit margins? Once you have year-to-date profits in order, review the areas that could be adjusted for the upcoming year. Start preparing your goals and doing research for future industry and accounting trends as you finish out Q4 and start the next year.
One other tip? Take a moment to implement new software programs that could assist you in meeting your goals.
Invest in a Tax Counselor
As you’re catching up with your taxes, you may have run into some confusing tax obstacles. Trained accounting professionals can help answer some of those confusing tax questions. Their expert knowledge is helpful to guide you through tough issues you may have. They can assist you in developing a list of end-of-year tasks that will make submitting your taxes much easier. Tax counselors are experienced in evaluating and addressing your needs to ensure that your taxes are filed properly. They are also committed to helping your well-being as the tax season can become stressful and overwhelming to small business owners. They’ll help you set goals for next year so that things run a bit smoother and you will have weekly, quarterly, or yearly tax responsibilities planned. If you already have a tax counselor, it might be a good time to contact him or her for a consultation.
Questions? Contact us today! We’re happy to assist you with all your end-of-year tax needs.