It’s the time for festivities! The calendar year drawing to a close also is synonymous with holiday shopping, gifts, celebrations, and vacations! This is also the time when small business owners don their thinking caps and put in some goals and objectives for the year ahead while closing the accounts for the current year.
Know the deadlines
It’s important to know the dates for filing business tax returns to avoid extra cost or penalties. The first step towards smart tax planning is to make a list of all the relevant deadlines for filing that are specific to your business. Here are some general deadlines for filing:
- April 17, 2018, is the deadline for sole proprietors and single-member LLC returns. This is also the deadline for filing C corporation returns on Form 1120.
- For partnership firms, the deadline on Form 1065 is March 15, 2018.
- March 15, 2018, is also the deadline for S corporation returns on Form 1120 S.
Be aware of current tax laws
Staying updated on tax law changes for the upcoming year will be crucial for implementing a smart financial strategy for the year ahead. Whether it is in terms of healthcare coverage reporting or tax reforms, be well informed with the latest happenings. Consult a tax advisor to understand the implications of any such changes.
Implement or review 401k plan
Implementing a retirement plan is a good way of saving up tax with the government providing tax credits for employers who have a 401(k) plan. If you are a start-up, implement the 401(k). The IRS guidelines state that “businesses with fewer than 100 employees, but at least one beyond the owner, qualify for up to a $500 tax credit to offset the administrative costs of the plan for each of the first three years of the plan – providing a cumulative savings of $1,500 to each business”. The retirement plan is also valuable to the employees besides helping you save up some dollars! As a business owner, you are also an employee and you can deduct your own contributions to 401(k) from your personal earnings as well to earn tax credits.
Make smart purchases
Inventory management is a key aspect of your tax planning. If you already have a smart asset and inventory tracking system, it would be easy for you to review the entire asset lifecycles to see if you need to make new purchases. If you do not have professional asset management software, take up one such as GoCodes. With unlimited data storage on the cloud and free scanning app that can be downloaded and used on any smartphone, GoCodes provides end-to-end solutions for all asset tracking needs. A comprehensive inventory register will let you understand and anticipate future needs. If large supplies of any equipment or asset are anticipated or equipment upgrades are needed, you can factor in these costs into your tax planning and maximize your deductions. Make additional purchases if necessary that can help enhance productivity while optimizing tax deductions.