Believe it or not, we’re already halfway through the year, 4th of July has already passed… Not sure how that happened! But now is a great time to give your records a little tax review to stay on top of everything while your memory is fresh! It’s also a good way to see if you’re on track with your financial goals so far, and figure out what you need to adjust to maintain those goals for the rest of the year.
Review your business entities
Is your business structured in the best way possible? Is everything in your growing empire set up in a way that benefits your taxes the most? When you have LLCs, C-Corps, and other business entities structured properly, they are one of the best tools for reducing taxes, resulting in what could be tens of thousands of dollars per year!
Even if you started out with a great setup, once each entity grows to a certain level of income it might be a good idea to re-strategize. Missing the ideal time for this can be very costly so make sure to prepare, and don’t hesitate to ask a tax professional if you’re not sure.
How do your entities pay you?
Ensuring that each one is paying you the optimal amounts will minimize your taxes as well. Now is a great time to look into this because making changes will be easier than at the end of the year when you have other things to worry about!
Document everything and update your books
Have you documented everything to ensure you receive all your tax savings? Now is a great time to do it while your receipts are still legible and things are fresh in your memory. Having accurate documents is the best way to successfully get through an audit.
Many parts of your business can be effected by your books, and rely on accuracy. It’s even better if you can update them month-to-month with everything from:
- Mileage logs for your business vehicle or business travel
- Receipts for expenses eg. business meals
- Hour logs for real estate professionals
Keeping a close count on these means you’ll miss fewer tax savings and be more accurately prepared if Mr Auditor comes knocking.
If this is something you know you don’t have enough time to do properly, finding certified bookkeeping services can give you peace of mind that things are being done right so you can focus on running your business.
It’s easy to forget when you’ve paid for something for the business with your personal funds.
Of course we’ve all heard that commingling personal and business funds is a very bad idea when it comes to the tax and legal status of your business. So bring out your organization skills and make sure to pay for business expenses with business funds, and likewise with personal. The one common exception is business expenses paid by you (or an employee). It’s perfectly fine to have a reimbursement program in place for certain things, like meals or travel expenses.
Back to documentation, make sure to get reimbursed and document these for the business so you don’t miss any tax deductions – they really do add up!
Are you a busy business owner with other things to worry about? Contact D&M Accounting to see if our accounting services for business would be a good addition to your team. Let us handle the books and taxes, and do the thing you do best – build your business!