20 Oct Small Business Tax and Accounting Tips for End-of-Year
The start of a new year signals the beginning of tax season for most Americans, but business tax planning and accounting needs to come a little earlier. To ensure your bookkeeping is in good shape in advance of tax deadlines and in accordance with reporting rules, here are some small business tax and accounting tips to keep in mind as the year comes to a close – and put them to use all year in 2018:
Business tax return due dates
Among the most important things for business owners to know is that some tax filing deadlines have changed recently. For the tax year ending December 31, 2017:
• Sole proprietors and single-member LLCs preparing business taxes on Schedule C must file by April 17, 2018.
• Partnerships and S corporations need to file returns by March 15, 2018.
• Standard corporations need to file by April 17, 2018.
Tax bills are one of the most common sources of frustration for small business owners who need to maintain steady cash flow throughout the year. The sooner you can determine your tax liability, the sooner you can plan for any unexpected expenses and take out a small loan to cover the cost, if needed.
Planning revenues and expenses
Companies that operate on a cash basis might consider taking certain steps to defer revenue or accelerate expenses before the year ends, therefore reducing their tax liability. This is another way that early planning pays off.
For example, say your year-end projections are looking especially good and you might finish 2017 with higher-than-expected profits. That could also mean a higher tax bill. To reduce taxable income, you could choose to push some invoices from the end of December to early January. For the same effect, you could pay some expenses in advance-maybe you are attending a trade show early next year, but you can pay the registration fee now.
If you’re a small business owner or self-employed, retirement might not be priority number one. But no matter how far off it seems, or how little you think you can spare to save, the time to start planning and saving for retirement is now. Use the end of the year to assess where you and your business are with your retirement plan.
If you are already contributing to your own personal savings fund, like an IRA, review how your investments performed this year and see if you can rebalance your portfolio to increase returns or reduce expenses.
Many small business owners assume an employer-sponsored retirement plan for themselves and their colleagues is out of the question. On the contrary, these plans are becoming more affordable for small employers and are particularly useful for attracting and retaining a talented workforce. Be sure to research these options, including the SIMPLE IRA/401(k) and the SEP IRA/401(k) to understand their requirements and relevant due dates.
Business tax planning and accounting is rarely easy, especially when you don’t have the resources and funding set aside to take care of it. Planning revenues and expenses, as well as doing a retirement check-up, are small business tax and accounting tips that can improve your overall financial health. Talk to QuickBridge if you need help with a business tax loan or just a hand smoothing out cashflow at the end of the year.