Year-End Business Tax Review
Taxes give individuals and businesses anxiety every year. Filing taxes can be complicated, confusing, and overwhelming. If you own a business, taxes can be especially complicated, but by creating a year-end tax review you can organize your tax documents and head into the new year feeling confident.
Towards the end of the year, you’ll want to start gathering any documentation you need when filing taxes. An exact income and expense log can help you begin to prepare your taxes, as well as give you an idea where your business stands and how profitable it is.
You’ll also want a copy of your previous years’ taxes and documentation of any major financial gains or losses from the year. Once you have your documents together you’ll have a better idea of where your business stands and whether or not you need to make adjustments before the end of the fiscal year.
Developing a Game Plan
For many small businesses, it is wise to “zero out” their excess profits before the end of the year by investing that money elsewhere. If you plan to do, this make sure you are putting the money somewhere it will actually benefit you.
Paying yourself the excess or paying off a loan or credit card will not actually show as a loss on your taxes and therefore will not help lower taxes owed. Investing in new equipment for your business, however, will impact your taxes, so if you are in need of equipment make sure to purchase it prior to January 1st.
Working with a Professional
Preparing taxes as a small business owner can be incredibly complicated. If you begin working on a year-end tax review and feel you are in over your head, working with a professional can help. A contracted CFO can help you put together your year-end summary and then in turn help you develop a plan that can help your business in the long term. If your company isn’t big enough to have a full time CFO on staff, working with a contracted CFO can help your business save money while also giving you peace of mind.
By creating a year-end tax review you can eliminate some of your stresses about the upcoming tax season. Even if your review has you concerned, it gives you a starting point to make adjustments so that you can try to lower your tax expenses next year. If you own a business and are in need of tax assistance, give us at CFO source a call today (410-242-0526) to discuss how we can help you!