Your small business in tax season
In the 1987 Cohen Brothers classic, Nicolas Cage’s character receives a meager paycheck from a large, cigarette-puffing clerk who comments that the “Government do take a bite, don’t she?” Indeed, she does, and anyone who sleeps on their responsibility does so at their own peril.
For many, a $20 box of Tax Software is the solution. If you own your own business, though, you’ve no doubt considered the value of a CPA firm for your tax preparation. Business tax preparation can be dangerous in unskilled hands. While they may not require the elaborate attention of corporate tax returns, small business tax prep calls for more experienced services than something bought on a shelf at Walmart.
If it’s your first tax season as a business owner, here are some things you should know.
Quarterly vs. Yearly
If you are self-employed or drawing income on a Form 1099-MISC as a contractor and expect to owe more than $1,000 you should be making estimated tax payments. Estimated tax payments are part of the tax structure for anyone with income that is not subject to withholding. It includes income from interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards.
These payments should be made quarterly. The IRS will set the due dates. You may have been told that quarterly vs. yearly is a choice, but the reality is that waiting until the end of the year means leaving yourself open to interest and worse, IRS penalties.
Tax Season starts now
In school, there were two kinds of students, the ones who were ready to take a test at any given time and the ones who crammed the night before. Taxes are similarly divisive. You can skirt by and only make them a priority during “tax season” or you can be ready all the time. For a successful business, tax preparation means examining every part of their business and cash flow to ensure that it’s setting them up for the lowest amount of risk and highest amount of benefits.
The issue is that running a great bakery or bookstore doesn’t mean you’re a whiz at tax structure. That’s why seeking the help of a CPA firm is the best bet.
Tax prep requires an ongoing relationship
There are CPAs who you hand numbers to that in-turn hand you back your tax refund or responsibility to the IRS. There are also CPA firms like Burkett Burkett & Burkett in Columbia SC who provide regular assurance services. This means they are on top of your business’ key financial factors:
- Business Risk
- Product Quality
- Performance Measures
- Information Quality Reports to the Board
- Quality of Process and Controls
- Strategic plan execution
Get a strategy around accounting confidence
A CPA firm can dissect your individual business and create an accounting system that fits. They can pull information and analyzing it so that you can be truly informed on your decisions as a business owner. In addition to designing your over all strategy, they can also train personnel in procedures to keep you or your employees independently capable of steering the finances of your business.
Running a small business at tax time can be daunting. The penny-pinching option of taking on the responsibilities yourself, while alluring can be a route to serious money loss.
From the team of writers at RevenFlo.