Mid-Year Tax Planning for Business

Don't make the mistake many business owners make by waiting until the end of the year to worry about your taxes. Mid-year tax planning allows you to make changes and adjustments while you still can, saving you time, money, and surprises when tax season arrives. There's nothing worse than hearing your accountant say, "If you had only made this one adjustment, you could have saved (insert dollar amount here)."

The first step is to make an appointment with your CPA or accountant. Summer is a quiet time for the accounting profession, which makes it the perfect time for a mid-year tax planning session. Your accounting professional has recovered from tax season, and the office is quieter, so you're catching them when they're at their peak. 

Here are a few things you should cover in that meeting to help you take advantage of potential tax savings:

1. Review estimated taxes. In looking at what you've paid so far this year, your accountant can help you project the remaining estimated tax payments. Have you paid too much? What do you anticipate earning in the next six months? Making adjustments now can help you save money now and at tax time.

2. Reevaluate your business entity. Businesses are living organisms; they change and grow over time. What worked for your business when you first opened your doors may not be working for you -- and your tax bill -- now. When you meet with your CPA, decide if you need to make changes to the way your business is structured. 

3. Consider equipment purchases. Take advantage of Section 179 for certain equipment purchases you may be considering. Planning your purchases based on your projected financials can help you limit your tax liability

4. Review retirement savings. Your appointment should include a review of your retirement planning. Make sure you're contributing enough to a plan and limit your tax liability at the same time.

5. Analyze your S Corp salary. Make sure your salary and distributions are correct. If your salary and distributions are out of balance, you can pay higher taxes or be at a higher risk for an audit.

6. Ask if it's time to hand over your books to a pro. If you're having trouble keeping up with your financial management, let your CPA know. They may be able to provide a range of services, from virtual bookkeeping to CFO services, so you can focus on growing your business.

We're currently booking mid-year tax planning appointments. Contact us today to schedule yours.