5 Simple Business Tax Steps to Take Before December 31

In just a couple of weeks, the tax year will come to an end. So this is your last chance to make the moves that will maximize your 2017 return’s accuracy and minimize the taxes you owe.

1. Consider new equipment purchases.

You might be thinking you’ll wait until the first quarter of 2018 because cash flow will be better then. Think again: buying before year-end lets you use Section 179 or other tax benefits and take some of the purchase prices from the money that would otherwise have gone to the IRS.

2. Determine your tax bracket.

Review your 2017 profits with your CPA to figure out exactly what percentage rate you will be taxed at. Once you know that amount, you can more easily manage cash flow, plan for the first quarter of 2018, and make informed decisions about such expenditures as employee holiday bonuses or leasehold improvements.

3. Check personal credit cards for business expenses.

Situations where you can’t pay with the company card happen to every business owner. So you give the supplier your personal card. And in the fast pace of daily operations, it’s easy to forget to reimburse yourself for those expenditures. Now is the time to move that money where it belongs.

4. Pay state tax now.

If you pay your state tax in 2017, you can take it as a deduction on your 2017 return.

5. Do a year-end inventory reconciliation.

Why pay tax on merchandise that’s unsellable, or just plain not there? Your reconciliation should account for spoilage, shrinkage, returns, and out-of-date products.

Bonus tip: Utilize Xendoo’s catch up services.

Xendoo understands that, as a small business owner, you wear many hats and have next to no time to keep on top of accounting and bookkeeping. You may have been behind for years, yet we can usually bring your financials up to date in a week. It’s that easy to start the new year with peace of mind about the state of your business … not to mention the tax savings we just might find!

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Lifting the Burden of Back Taxes: It’s Easier Than You Think

First, let us assure you that you are not the only one with back taxes hanging over your head. At Xendoo, we help business owners regain their peace of mind every day; and in many cases, there are things we can do to lessen the impact you’re fearing.

Here are some reasons to get that monkey off your back now and start 2018 with a clean slate.

3-year limit on claiming refunds.

What if you were actually owed a refund for one (or more) of the years you didn’t file a return? The government only honors refunds for three years; so, every year you let go by could be more money lost forever.

When we bring your financials up to date, we’ll make sure you receive every tax benefit you’re entitled to. You might find that you owed less tax, or were due to a bigger refund than you thought.

Late penalties and interest never expire.

The longer you let your back taxes slide, the more you’ll pay over and above the actual amount of the tax. And unlike with refunds, the government has no time limit on collecting those debts.

You may qualify for a penalty reduction.

Life happens, and sometimes you just can’t pay your taxes on time because of circumstances beyond your control. The IRS makes allowances for this by providing small businesses Penalty Relief Due to Reasonable Cause. According to the IRS website, typical reasonable cause situations include:

  • Fire, casualty, natural disaster or other disturbances
  • Inability to obtain records
  • Death, serious illness, incapacitation or unavoidable absence of the taxpayer or a member of the taxpayer’s immediate family
  • Other reason which establishes that you used all ordinary business care and prudence to meet your Federal tax obligations but were nevertheless unable to do so

You may not have to pay it all at once.

Our tax experts can advise you on making a repayment agreement with the IRS. Just remember that the longer you take to pay your debt, the more interest will accrue on the unpaid amount.

Delinquent taxes affect your credit score (and more).

This debt could be costing you in ways you haven’t even thought of. Everyone from landlords to lenders to suppliers will check your credit report, and give you a worse deal (or no deal at all) if it doesn’t meet their standards.

It’s all too easy for back taxes to grow into a mountain you’re afraid to climb. But with Xendoo’s tax catch up services, you can rest easy that experts are digging through that mountain and finding every possible way to take the load off your mind.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.