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Believe it or not, the dreaded April 15th tax deadline is only seven weeks away. But don’t panic! Call your CPA and follow these eight steps for a smoother business filing process from start to finish.
Typically, the earlier you provide your information, the sooner you will get your return, and peace of mind, back. If you are unsure what to provide, send in your year-end trial balance, general ledger, bank statement and bank reconciliation, Form W-3, and payroll reports. With that information, your CPA can make a good start on the return and then let you know if anything is missing.
Did your business experience a merger or acquisition? Did any partners leave the company or did new ones join? Did your company expand into any new states or begin any new lines of business? These and other significant changes should be shared with your CPA early in the compliance process. Waiting until the last minute to reveal this kind of information can have unintended tax consequences and delay finalizing your tax return.
By identifying any discrepancies or irregularities ahead of time, you can minimize delays and unexpected compliance costs. As part of this process, it is a good idea to reconcile your bank accounts and update your company’s depreciation schedules for any new additions or disposals. If you need help with these details, contact your P&N tax advisor to discuss the best approach.
Under the rules established in the 2017 Tax Cuts and Jobs Act, meals and entertainment expenses are now two distinct tax deductions with different deduction limitations. While most meals, including client business meals and occasional meals provided to employees, are 50% deductible, entertainment deductions are essentially disallowed. Thus, taxpayers should record food and beverage costs separate from entertainment costs to aid in the preparation of tax returns.
With so many varying credits available, it may be difficult to determine which credits you qualify for. However, through open discussions about your business operations, your CPA can help you pinpoint potential credits and assist you in claiming them. These credits are generally a win-win for both your business and your employees.
State and local tax laws vary widely from state to state. Identify the states where you do business, and your CPA can walk you through any state tax compliance requirements. This is also a good time to review any other state tax filing requirements, such as sales and use tax obligations. For example, if your business participates in e-commerce, then the 2018 U.S. Supreme Court ruling in South Dakota v. Wayfair, under which sellers no longer need a physical presence for states to require the remittance of sales taxes, may have altered your nexus profile. During an income tax review, businesses engaged in online sales can also review their transactions closely to determine which states are at issue from a sales tax perspective.
Of course, it is never too early to think about next year. The 2020 tax year has already begun, so stay proactive and maintain your daily accounting. There is a new Form W-4 for 2020, so now is a good time to check in with employees about updating their withholdings. Remember to routinely collect a Form W-9 from contractors before you pay for their services. These simple steps will put your business in an organized position for the next filing season.
Finally, don’t forget the current tax year 2019 filing deadlines:
With these steps in mind, contact your P&N tax advisor today to get your 2019 business filing started.