April 15th—the deadline for filing your 2018 taxes—is quickly approaching. Whether you’re still compiling paperwork or you’re breathing a sigh a relief, TPI Group has prepared some tips to use in your tax preparation strategies either this year or next year.
Start Shopping for the Business
The end of the year is a great time to start buying new office furniture, fresh office supplies, and new equipment that your business needs. Making the purchase at the end of the tax year allows you to maximize your deductions. Remember to speak with your tax accountant because they will tell you how much you can spend on business purchases, so you exceed the limit of allowed deductions.
Double Check Your Business’ Classification
Your business classification might not seem like a big deal, but it can have a huge impact on the amount of taxes you have to pay. Types of small business classifications include:
- C Corporation
- Limited Liability Partnership
- Limited Liability Company
- S Corporation
- Single Member LLC
- Sole Proprietor
Changing your business’ classification isn’t something you should do on your own. An attorney and accountant will help you decide which classification is best for your situation and help you with all the paperwork. Your attorney will explain when you have to pay—for example—quarterly taxes.
Add Money to Your Retirement Savings
It’s in your best interest to make a decently sized payment to your chosen retirement fund by December 31st. The money you contribute to the fund can be subtracted from your annual income, which decreases the amount of income tax the IRS collects.
As December 31st draws closer, you might also want to consider deferring income until after the New Year; however, your accountant is the best person to tell you if this is a good option.
Carefully Chose a Source of Help for Payroll
When you’re just starting out, it makes sense for you to handle your small businesses payroll, but as you expand, payroll becomes time-consuming. Keeping up with payroll taxes can create headaches. Hiring a payroll company is often the best choice. It opens up more time in your schedule and also ensures that, when tax season is upon you, your payroll is in order. Make sure you take your time and chose a payroll firm that has a stellar reputation. Many of the small, quick payroll firms lack the necessary experience or turn out to be scams.
Use Section 179 to Calculate Deductions
The Section 179 calculator is a huge help to small businesses when they’re preparing to file their taxes. It allows you to determine if you should gradually allow your business expenses to depreciate or if you’d be better off claiming the deduction in one lump sum.
The staff at TPI Group have a combined experience of over 80 years. We are happy to provide financial advice, prepare your taxes, clarify the filing process, offer tax tips, and more. Contact us today for a free consultation.