With April right around the corner, I just wanted to remind you to get those taxes done.
As a small business owner, I know how imperative it is to count those coins, BUT with the recent (and constant) changes to our tax laws, I really want to encourage you to consider using a Certified Public Accountant.
I attended a workshop a few weeks ago hosted by Tariqah Mills of T3 Services and here are the two things that stood out to me most:
Know your tax obligations:
There are different tax rules for each business structure. There are a few new filing dates for this year. Check with your tax professional for the updates.
LLCs, Corps (including non-profits), S-Corps… knowing what changes have been made may dictate what changes you need to make. It may be simple organizational changes or complex financial changes. Sole Proprietors – we generally have the simplest but still need to be aware! Your accountant would be the best to advise you on these matters.
Know the Difference between Independent Contractor vs Employee
Did you know that the government has very strict guidelines to distinguish between employee and independent contractor?
I used to work for accountants and I can not tell you how many people came into the office with notices from the IRS or the NYS Unemployment Office, claiming the person that was working or them had NOT been an employee. Almost all of these small business owners had signed independent contracts.
Time after time, these small business owners had to wade through months of paperwork with the accountant/lawyer at the rate of over $300 per hour to try to resolve the matter.
If you have an employee, that is NOT really an employee, there are additional tax obligations. Be aware!
Please make a note of the IRS’s guidelines as well as those of your local government.
Also, things to note:
- There is a HUGE difference between a tax preparer and an Certified Public Accountant. Anyone can pop your numbers into a computer with generic, pre-assigned algorithms and shoot out a basic tax liability profile. Your accountant, however, should take your complete business and personal profile into consideration and give you what works best for you… specifically.
- Most business owners focus on the taxes they think they owe without considering the whole picture. You most likely are aware of how much tax you should be paying. However, are you considering the complete picture? Your accountant would be the best one to explain and discuss your specific tax situation, including the liabilities after income and expenses (and whatever else they throw in there to configure those numbers, lol).
- Don’t delay filing your taxes. Failing filing your taxes on time does not stop (or even delay) the tax authorities from assessing and assigning your tax liability. Interest on that liability is incurred immediately. In addition, you incur penalties for not filing on time. Penalties that, in most situations, could have been avoided.
Finally, to help get you ready for your meeting with your tax professional, you can get our tax prep checklist here.