For many small business owners, the only challenge greater than maintaining an effective accounting and bookkeeping system is preparing effectively for taxes.
Since most small businesses reach the end of the calendar year desperate to reduce their tax burden, many entrepreneurs find themselves spending money and buying products or services that they (most likely) just don’t need.
Not only are you draining your short-term cash flow, but you’re also throwing money away on investments that may never truly help your business. One strategy to consider when evaluating ways to even out your year-over-year tax liability is to accelerate or defer income or deductions. How you plan and time compensation is another critical point to consider with your tax planning.
Consider these factors when working with your accountant on an appropriate compensation strategy. Company retirement plans, including 401(K) plans, SIMPLE plans, IRAs, profit sharing and pensions can reduce the company’s taxable income and help reduce taxes when the reasonableness threshold for salary compensation has been reached.
However, the key is to be properly compliant with the law and proactive in establishing such plans, even if they are funded at a later date.
By following these four tips, you will be well on your way to creating a sustainable, successful tax strategy for your small business. Enter your email address to subscribe to this blog and receive notifications of new posts by email. Haines & Lagerquist CPAs is an award-winning full-service public accounting firm headquartered in Silver Spring, MD serving forward-thinking businesses throughout the Greater Washington region including Maryland, Virginia and Washington DC. Tax planning for small business owners You should be in contact with such accountant who knows how to deal with numbers.
Tax planning for small business owners In case you need taxpayer money from the CRA, you will need to submit payment before the deadline. Tax planning for small business owners Will my expenses WCB be affected if I am certified for tax benefits for people with disabilities? Businesses should send Forms 1099 and 1096 to the IRS, a separate 1096 is required for each 1099 type.
S corporations – File your 2010 calendar-year income tax return (Form 1120-S) and pay any tax that is due.
File Form 2553 (Election by a Small Business Corporation), by this date to be treated as an S corp beginning with calendar-year 20ll.
Employers should deposit the February 2011 payroll tax if you’re not on a semiweekly deposit schedule.

If you have any questions about tax planning, small business tax planning or think I can help you in any other ways, contact me, or give me a call at (239) 384-9688.
This information is based on facts, assumptions and representations as stated and authorities that are subject to change.
LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
As a result, a high percentage of small businesses pay more in taxes than they need to — or find themselves paying unevenly from year to year. For example, you can apply this strategy to transactions such as selling property, leasing, inventory, compensation and depreciation or expense elections.
For example, in a C corp., the company’s taxes are reduced as compensation is paid to employees.
In addition, businesses receive extra time from the IRS to take advantage of retirement plans prior to submitting their taxes each year. Consult with your professional CPA to develop a comprehensive tax strategy for the 2015 tax year and beyond. Yet they often do very little to protect it and maximize its after-tax income.While millions of Americans are filling out their federal and state tax returns, small business owners would be wise to consider whether they could benefit from strategic tax planning. 3rd – If employers have not received a new Form W-5 for 2011 then advanced payments of earned income credit should be stopped. 18th – December 2010 monthly payroll tax deposits are due if you’re not on a semiweekly deposit schedule. 31st – Businesses should give Form 1099 information statements to the recipients of certain payments you made for services during 2010 as well as statements to customers who paid you more than $10,000 in any , single cash transaction during 2010. 18th – Employers should send Form W-3, Transmittal of Wage and Tax Statements, to the IRS along with Copy A of all employee W-2s you issued in 20ll for calendar-year 2010. 15th – C corporations should file a 2010 calendar-year income tax return (Form ll20 or 1120-A) and pay any tax that is due. Provide each shareholder with a copy of Schedule K-1 (Form 1120-S), Shareholder’s Share of Income, Deductions, Credits, etc., or a substitute Schedule K-1.
If you miss this deadline, the switch generally won’t take effect until calendar-year 2012.
31st – Employers should, if forms are filed electronically, send Forms 1098, 1099 or W-2G to the IRS.

We will not update this information for subsequent legislative or administrative changes of future judicial interpretations. The facts of each individual situation can have significantly different outcomes when applying tax law. For a company operating on the cash basis, one effective way to postpone income into the next tax year is to delay billing, and therefore move cash receipts from the current year into the next year effectively.
Erin Hollis, Director, Tax Services for Strategic Tax Advisors (STA), said, “Tax laws for businesses are more complicated than for individuals. You should begin withholding 2011 income tax from the pay of any employees who claimed exemptions in 2010 but did not give you a new Form W-4 to continue the exemptions this year.
If you want an automatic six-month extension, file Form 7004, and deposit what you estimate you owe. Rather, a dollar you spend is a dollar counted towards the deduction, which typically yields about one-third in actual tax savings. The only public hearing about raising the 5th cent will be Thursday, March 19, 2009 at 6 p.m. The Plan has never been approved by voters and many city and county commissioners agree, the PAC may never be built.
Leta€™s not double Tallahassee 's Culture Tax to please a€?a small group of people with a lot of desire" to go around Leon County voters once again.
Now is the time to redirect the 4th cent currently dedicated to the PAC to valuable a€?heads in bedsa€? tax regenerating tourism advertising and marketing. A Chairman Desloge, please show citizens that you truly want public input on the PAC issue. A To redirect or not to redirect the 4th cent to tax regenerating tourism promotion?A  These are the questions.
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