As a business owner, you are wearing different hats all through the year. And if you are like the vast majority, you probably think about the tax bill only end of the year or as it nears the tax filing deadline. This often as you know results in higher taxes and lesser options to invest in tax saving investments.
So, we have a quick checklist for business owners to ensure you are on track mid-year for the 2017 tax season. Please do share with others in your business network.
1) Hire your tax professional & business advisor:
If this is your first year in business or if you are considering a change, this may be the best time to meet and hire a tax professional. Few CPAs -Certified public accountants also offer multiple services in addition to just doing the taxes eg: business formation, purchase/sale/merger assistance, accounting, payroll. So, ensure you do your due diligence and chose the right professional matching your business needs. In the long run, the benefits will outweigh the cost. Invest wisely by choosing the right resources to help you.
2)Prepare and file your 2016 tax return:
If you have filed an extension, ensure you are on track and preparing your 2016 tax return. This will ensure any net operating losses etc are accounted for and accurately filed.
3) 2017 Year to date Tax estimation:
The tax estimation is a quarterly process. The next quarterly deadline is Sept 15, so ensure you calculate your taxes and make a payment by the September 15 deadline.
For the period: Due date:
Q1 Jan. 11 – March 31 Deadline April 18
Q2 April 1 – May 31 Deadline June 15
Q3 June 1 – Aug. 31 Deadline Sept. 15
Q4 Sept. 1 – Dec. 31 Deadline Jan. 16, 2018
4) Retirement accounts contributions:
This is also one of the most overlooked tax deductions for business owners. So schedule an appointment with your CPA to see which may be the best fit for you.
There are 4 types of retirement plans available:
5) Equipment purchase/depreciable property- Section 179 tax deduction:
If you purchased property between 1.1.2017 and 12.31.2017, you may choose to deduct up to $500,000 (equipment financed are also eligible). Ensure you review your equipment and tools purchased with your tax professional so they can provide the necessary consultation on end of year depreciation/expense deduction as appropriate based on your tax situation.
6)Review your bad debts/outstanding accounts receivable:
This may be a good time to review your bad debts and accounts receivable ( if any). If your bad debts are exceeding 1% of total sales, its time to review your current accounts receivables & collection policy. Also you can grant small discounts to customers who are timely with payments.
7) Sales Tax, Payroll and employment taxes ( if you have employees):
Ensure you have filed form 941(quarterly) due and state specific filings as applicable.
8) Financial reports and updating your books:
Ensure they are fully reconciled and all expenses are accounted for until mid-year. This will save time and money for the end of the year tax discussion with your tax professional.
Posted In: TaxGo Back