Why Tax Planning Should be a Year Round Priority

Author: Keith Huggett

Obviously, your business finances are a year-round priority. For example, you don't wait until the end of the year to address a pile of bills that is several months old. Similarly, you pay your employees on at least a monthly basis, and probably more often.

So with money matters on the calendar every day, why would you treat your income tax obligations any differently?

It's critical that you keep taxes in mind 365 days a year. Proper tax planning not only optimizes savings, but it also decreases your chance of an audit. You don't have to have a tax return on your desk and calculate your current obligation every day, but there are things you can do throughout the year to make tax time smoother, faster -- and more comprehensive.

Here are four tax planning tips that will be helpful for your business.

• Make taxes an ongoing, high-priority concern. When purchasing anything for your business, ask yourself not only whether you need it and can afford it, but also, What are the tax implications?

• Keep thorough records. If there is any possibility a purchase or expense may impact your tax return, keep a receipt and any other pertinent documentation. It's easier to shred unnecessary paper than to recreate something you lost or threw away.

• Use QuickBooks to streamline accounting processes and year-end reporting. Automated processes and electronic records make tax planning easier and minimize the opportunities for errors. QuickBooks won't do your taxes for you, but it can provide comprehensive reports of tax-related transactions.
• Educate employees to be tax-conscious. Any employee with access to expense accounts or financial records should understand the need for precise documentation. Those with decision-making power must also understand the downstream results of their actions.

We can help you reduce your chances of an audit, set up your ongoing tax planning objectives and minimize your tax obligation as we prepare your returns. Contact us at The Tax Office for a free consultation today, and to learn about the full range of business and personal accounting services we offer.