With 2015 behind us, it is time to begin the process of gathering the information necessary to prepare your taxes. For most small businesses, the data collection process can be time-consuming. At the same time, if your taxes are not completed in a timely manner, there is the risk of penalties and fines from the IRS and your home state. For those who attempt to complete them on their own, there is the risk of mistakes that can add substantial costs to your business. However, a tax professional or accountant, such as Tax Problem Resolutions, Inc. in LONGWOOD, FL, can assist you in making sure your taxes are completed and filed in a timely manner.
Below are four steps for taking on tax preparation in 2016, making the process easier and avoiding costly mistakes.
The costs of a filing mistake can be significant. There are penalties, fines and even interest for taxes that are not filed properly. Not to mention the payroll and sales taxes, all of which must be carefully calculated. With the tax code being updated on an annual basis, it can be overwhelming to complete with the attention to detail necessary. Having a professional handle this process can save you time and provide cost savings as well. With a tax professional, you receive quality customer service at the local level without breaking your budget.
Using a tax professional will assist you in finding all the appropriate deductions for your business. Deductions allow for you to deduct business costs from gross income. There are multiple deductions available, from automobile to travel expenses. Additional deductions could be found in your home office and entertainment provided to clients. A tax professional can assist you in deciding which deductions match your business, but also can point out ones that you might not have known.
Classifying your business correctly can reduce your tax rate. There are multiple classifications with various tax liabilities and rates. Some of the options include a partnership, sole proprietorship, and of course different types of corporations. Talk with your tax professional about how you have your business set up and they can help you to determine the best classification.
For small businesses, there are plenty of options available to assist you in paying your taxes in a timely manner. One of the most frequently used is the extension request. This is where you request an extension of your tax filing and payment due date. However, not all of these requests are approved. Depending on your business, your tax professional can suggest other options in addition to the extension request to assist you in modifying your due date. Keep in mind, however, that it might be in your best interest to make quarterly tax payments. This can assist in balancing your tax burden throughout the year.
However, if you have a current tax amount due to the IRS, consider negotiating a monthly payment plan. The IRS is often willing to do so, because it saves them working through a collection process. The payment plans can be based on your business’ needs and there are eligibility requirements. While this can be beneficial to your business, keep in mind that the IRS does charge interest. Therefore, it may take significantly longer to pay off your obligation because the obligation grew due to interest.
As we have seen, there are a variety of options to reduce or manage your tax liabilities. However, you will want to remember that your tax professional can provide you with more specific ideas for your business. This could include the best way to purchase equipment and other necessary assets so that they do not significantly increase your tax burden.
Working with a tax professional or accountant, you can balance the needs of your business with the potential tax implications those choices can bring.
In the final analysis, carrying for your taxes is a necessary part of running a small business. At the same time, one wrong step can bring a large bill in terms of penalties and fines. By using a tax professional, you can enjoy the benefits of their knowledge to make sure that you are filing your taxes correctly.
Call or click to talk with one of the tax professionals or accountants at the offices of Tax Problem Resolutions, Inc. in LONGWOOD, FL, to learn about how tax professional services can assist you to prepare for filing your tax return for 2016.
