This year has truly been a year unlike any other for businesses and individuals alike. Pandemic shutdowns disrupted most businesses across the country. The federal government proffered multiple forms of financial assistance to businesses with mixed results. Many businesses had to rethink their core offerings and how to deliver those offerings to customers who were quarantined inside their homes and reluctant to venture out for fear of getting sick.
And now, we’re heading toward the end of the calendar year and the government will soon be asking all individuals to pay their personal income taxes. What great timing.
As a business owner, how tax efficient your business is has a great impact on your personal income. In a year when business revenue has been greatly disrupted and profitability may be a large question mark, ensuring every dollar is as efficient as possible for your business may literally be the key to on-going solvency.
How can you accomplish that in the next, few months before the end of the calendar year? There’s really only one way: through smart tax planning for your business.
Business tax planning reviews and addresses core business operations and structures to ensure your business keeps as much money in your pocket as possible. It can be surprising how one simple mistake in how your business is structured can possibly cost you thousands of dollars in over-paid taxes. Some of the operational and structural areas under consideration in tax planning include:
- Business entity
- Expense acceleration
- Income deferral
- Retirement plan funding
- Employee benefits
- and more
Each one of these bullet points is independent of the other and by appearances, may only be marginally consequential in terms of saving your business money. But appearances can be deceiving – some of these items can have great consequence in how much you pay in taxes. And even more importantly, the compounding power of these items together can become a major windfall for your company each year, every year. Surely, in today’s uncertain times, that notion should catch your attention.
While there is still time to conduct thorough tax planning for your business before the end of the year, now is not the time to delay doing so nor is this the year to kick the can down the road. Many businesses will need every advantage possible to make it through our current pandemic and economic crisis. Make sure you’re giving your business that edge it needs to make it through to the other side. Ultimately, make sure you’re giving yourself that opportunity.
To get started, contact a trusted CPA that specializes in business tax planning to see what your savings might look like. If you don’t have one, it would be our privilege at NextGen Accounting to work with your business to uncover those savings that belong in your pocket. Our motto at NextGen Accounting is “Make Your Money Count”. Frankly, we cannot think of a better way for you to do that than through smart tax planning, whether you are working with us or another trusted CPA.