Hiring a tax professional to help with tax strategies for small business:
5 important considerations.
You’re busy, you’re dealing with day-to-day operations of your particular business and a skill set you have to excel in your field. But do you:
a) really have time to do your tax planning strategy?
b) do you have the expertise to do it right?
Most likely, you answered “no” to both questions and that’s the case with most small business owners. Tax planning is a complex field that can make or break a small business on just a few missteps. Here are 5 minefields you’ll want to be aware of as they’re meant to strongly suggest working with a professional team to support your efforts to operate your business as efficiently as possible.
- Deductions. Do you know with the myriad of opportunities small business are confronted with, what is and is not deductible? There are many options and, in some cases, depending on your business, they’re specific to what you do. The dollar amounts could also be significant and timely given your individual situation.
- Legal ramifications. What if you should miss something that has specific deadlines and filing requirements? Like employee tax filings or benefit requirements. While these can be beneficial to the business, they come with specific rules and guidelines. You may want to check out this IRS posting. (Then again, with a tax strategist working with you, they’ll have done this homework for you!) “Employers Tax Guide to Fringe Benefits” A helpful paper from the IRS. (IRS Publication 15-B, 2020)
- Charitable donations may be beneficial to your tax liability depending on the structure of your business. Are you incorporated, a sole proprietor or an LLC? Have you a charity you’ve been donating to personally that may be better off with contributions thru the business?
- Business structure. Speaking of business structure, have you set yourself up for the most tax friendly structure based on what your specific needs are? This matters!
- Real property. Property comes with another whole set of rules and regulations. If you own your building or even your business assets you could be missing opportunities to reduce your tax liabilities unless you’re on top of the latest ramifications to ownership of business assets.
Tax law is an ever-changing constant. It’s very difficult for any business owner to keep pace and only stresses the need for greater scrutiny as the size of your business grows. Having the help of a tax professional to analyze, strategize and help you capitalize on the benefits afforded your business when evaluated properly should be one of the highest priorities any small business owner should have. The consequences of an error, innocent as it may have been, could cost your business, and you personally, a tremendous amount of resources and capital. There could even be criminal outcomes from a maligned tax strategy. Nobody would want to see this for their business. On the positive side of things, a solid tax strategy and good relationship with your tax advisor/CPA can only serve to help you grow faster, stronger and more resilient in the world of constant change. Also giving you more transparency and understanding of the ramifications of your business decisions before you make them.
For more information on this topic, please contact “Outsourced CFO” to see how a proper tax strategy may benefit you and your company.