Staying a Step Ahead of Tax Season
Managing a small business is demanding, and we'll bet finding time to do tax planning probably isn't one of your year-end priorities. However, according to tax professionals, fall is the best time to make sure that you do not give unnecessary money to the Internal Revenue Service next April. Here are a few tips you can take to protect your business.
- Get out last year's tax forms, and this year's receipts, expenses and billing statements.
- Use your year-to-date calculations to project what your income will likely be for the full year.
- Compare last year's income, expenses and taxes with this year's projections to approximate if you will owe more or less for 2000. Looking at this now will spare you any unpleasant surprises.
- If you usually have a professional do your taxes, you should still project your own numbers. If you go in prepared, then you can save money and get more value out of the consultant.
- Maximize the allowable contribution to your retirement account. This pre-tax money is a great way to cut down on your taxable income. You have until April 15th to contribute to your prior-year retirement account.
- Expense office equipment as a tax write-off. You can expense office equipment as a write-off as long as you purchase it by the end of December.
- Accelerate your expense payments. If you've got a shipment ordered, contractor hired, or some other expense set up for early next year, you may want to cut that check early - this year. Only do this if your cash flow is dependable.
- Use the calendar year to your advantage. One thing you can do if your business can afford it is to push end-of-year invoices into the New Year. The income those invoices generate won't get taxed until next year.
- W-2 forms should be given to your employees by January 31st. You can order W-2 forms right here on PCS Business Forms!
- File W-2 forms with the Social Security Administration (SSA) for your employees, showing wages paid and taxes withheld for the year. Send Copy A with your W-3 form (showing the total of all W-2s) by February 28th.
- 1099 forms should be given to your contract workers no later than January 31st. You can also order 1099 forms PCS Business Forms!
- Send copy 1 of the 1099 to the state tax revenue department by February 28th.
- Send copy A of the 1099 to the IRS along with form 1096 by February 28th (March 31st if you file them electronically).
On PCSBusinessForms.com, you can even find the appropriate envelopes for W-2 and 1099 forms. Make your tax season as easy as possible this year!
These Web sites have more valuable tax advice and information for small business owners:
Budget the time to review your taxes in advance - you won't regret the effort. You can save valuable money that you can pour back into your business instead of into the hands of the IRS!
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