If you’re familiar with our blog, then you know the importance of getting tax help not just around March and April, but year-round.
Most small business owners have day-to-day issues and responsibilities that are far more pressing than taxes. Yet there is a big difference between giving no attention to your tax needs and spending just three minutes each day to minimize your tax burden.
In many cases, business owners could benefit from tax advantages to maximize their profitability, but they’re either unaware of what they must do or don’t prioritize the steps they need to take. Conversely, owners leave many tax problems unaddressed, and they can cut deeply into their bottom line. With the right tax help, however, no owner would need to stress about compliance or profits.
What tax issues could you have now that will hurt your profits tomorrow?
5 Tax Problems That Are Hurting Your Business
A small business’s tax issues aren’t all equal. Some are simply lost opportunities for tax savings, while others lead to hefty tax penalties and interest that can cripple your company.
Here are just five of the problems you may be suffering from:
Not taking deductions available to you
The number of tax deductions that small businesses have at their disposal is extensive, yet so many owners leave thousands on the table every year. In all likelihood, you need an experienced small business tax advisor to help you identify these opportunities. If you’re not taking full advantage of your possible deductions, you’re limiting how much money you’re taking home for all of your hard work.
Making business decisions that have negative tax implications
Let’s face it, you have to make business decisions and purchases that your business needs to operate or grow. With that being said, such decisions are often made or structured in a way that have negative tax implications, but could have been advantageous. Every business decision you make has a tax implication. Don’t make a decision until you understand how it will impact your taxes and bottom line.
Not complying with ACA requirements
Much has been made about the impact the Affordable Care Act has on businesses, and for good reason. There are many new requirements, and thus best practices to ensure your compliance. Many business owners simply don’t have the tax help they need to understand what’s required of them. If you’re in this situation, do yourself a favor and avoid costly penalties. Learn what problems to watch for and work with a knowledgeable tax professional.
Improperly paying your team members
We’ve covered the topic before, and it’s one of the more common mistakes small business owners make. Paying an employee as an independent contractor or vice versa can cost you dearly. In some cases, the severe penalties for misclassifying employees and paying them improperly has put people out of business.
Incorrectly exchanging a property
Though not a frequent occurrence, purchasing or exchanging properties has potentially huge tax benefits. Such business decisions can truly improve the profitability of your business, but if done incorrectly, you won’t secure significant savings that bolster your bottom line.
Why You Can’t Wait To Get Tax Help
In many cases, if you don’t structure a transaction correctly from the beginning, you won’t be able to take advantage of its tax benefits. If you could get a 25% rebate on a TV purchase, would you buy the TV at full price and not take the time to complete the forms and mail them in? Too many small business owners choose not to “file” for the rebate, or simply don’t know that the rebate was available.
You make business decisions year-round. If you’re not getting help from your tax partner year-round and consulting with your advisor before you make these decisions, you risk missing opportunities to save money and pad your earnings.
Of course, many companies have tax problems that they’re completely unaware of. With so many complex regulatory and compliance tasks – not to mention how frequently they change – you can’t reasonably figure them out on your own. That’s not your full-time job. But it is the job of a capable tax advisor.
To ensure that your business is protected from costly issues, you need to get tax help now, before irreversible damage is done to your bottom line. An advisor’s knowledge helps you identify cash flow issues before they become a problem and prevent them from hurting you.
Do yourself a favor: Be proactive about your taxes to limit any potential damage to your profitability. Not only will you save money, but you’ll also save yourself stress.