If you’re ready to get ahead of the game and make sure you are preparing for 2024 taxes now, then you’ve come to the right place. Tax preparation and planning can be daunting when taken on alone, but thankfully with the help of Quantum Accounting’s team of experts, you can have peace of mind knowing that your taxes will be taken care of. In this blog post, we will walk you through the top tips for tax preparation and planning and how our team at Quantum Accounting can help make the process easy for you and your business!
Let's Talk Tax Seasons
During tax season, individuals and businesses must prepare their tax returns to avoid late-filing penalties. However, businesses have additional obligations that fall under the umbrella of tax season.
- Traditional Tax Season: While tax season for individuals typically falls between the end of January and April 15th, businesses have a more flexible tax season that depends on factors like their tax year, organization type, and whether they file for an extension.
- Payroll: Most businesses, except for the smallest ones, need to file or pay different types of taxes at least once a year. If you’re obligated to make quarterly estimated tax payments, you should pay by April 15, June 15, September 15, and January 15. If any of these days fall on a weekend, the next business day will be considered the deadline.
- Quarterly Taxes: As an employer, it’s necessary for you to submit federal, state and local payroll taxes regularly throughout the year.
Business owners should not only focus on tax season when preparing and filing their annual income tax returns. Instead, they should plan and organize all year long to meet their tax obligations.
Our Top Tips for Tax Preparation and Planning
At Quantum Accounting, we understand that tax preparation and planning can be intimidating and time-consuming. That’s why our team of experts have created a list of tips to help you get started with the process. Here are our top five tips for tax preparation and planning:
Organize Your Tax Paperwork
It’s important to gather all of your tax documents in an organized fashion. This includes any invoices, receipts, bank statements, and other records that could potentially be used to support deductions or income. Additionally, you should make sure that you are keeping copies of all the paperwork for yourself as well.
Understand Deductions and Credits
Understanding tax deductions and credits is important during tax preperation and planning. Deductions can help lower your taxable income, whereas credits can directly reduce your business’s tax liability. There are many different types of credits and deductions available to businesses, some of which are specific to certain industries or employee benefits like childcare.
Know the Latest Tax Laws
When preparing for tax season, make sure you are aware of the latest federal and state tax laws. If you’re not sure what these laws are, then it may be beneficial to seek help from a professional who is well-versed in the latest taxation regulations.
For example changes were recently made to small business taxes that involve ending special programs and tax relief that were put into place during the COVID-19 pandemic. Now, net operating losses carried forward can only offset up to 80 percent of your taxable income. This limitation did not apply to net operating losses generated in 2018, 2019 or 2020. However, starting in 2021, any net operating losses generated will be subject to the 80 percent limitation again.
Itemize Business Expenses
It’s essential to keep track of your business expenses throughout the year. Itemizing and categorizing your business expenses ahead of time will save significant time and hassle come tax day. Be sure to save all receipts, invoices and other records related to your expenses, as these are necessary when filing taxes.
Keep Up with Your Home State's Tax Issues
Don’t forget to stay up-to-date with your home state tax issues. Many states have both corporate and personal income taxes that need to be taken into account when filing. Additionally, certain states may offer special tax incentives or deductions for certain businesses or industries. Make sure you are aware of any applicable credits or deductions that may apply to your business.
Consider Filing an Extension
If you need more time to prepare your business taxes or cannot meet the April 15 deadline, consider filing an extension. An extension will give you six extra months to prepare and file your return. There are several different types of extensions available depending on which forms you need to submit. Be aware that while an extension gives you additional time to file, it does not give you extra time to pay your taxes.
Think About Emergency and Succession Planning
Finally, it’s always a good idea to plan ahead for an emergency situation . This could involve setting up a trust fund or creating a will that outlines how your business is to be handled in the event of an unexpected death or disability. Additionally, it may also be beneficial to look into succession planning so you can ensure the continuity of your business in the future. Taking the time to properly plan for these situations will give you peace of mind and ensure that your family is taken care of in times of need.
By taking these steps, you can make tax preparation and planning easier and more efficient. Doing so will also help you remain compliant with all applicable laws and regulations, allowing you to get the most out of your business.
Tax Preparation and Planning with Quantum Accounting
If you’re looking for help with tax preparation and planning, contact Quantum Accounting. Quantum Accounting provides comprehensive accounting services to businesses of all sizes, including tax preparation and planning. Our team of experienced professionals can help review your finances and recommend strategies that will maximize savings and ensure compliance with the latest federal and state tax laws. Contact us today to learn more.
We look forward to helping you with all tax preparation and planning needs!