It’s June. It’s sunny outside with flowers in full bloom and the Iowa Cubbies in full swing. Most likely the last thing on your mind is your 2011 taxes. In fact, those tax-related phrases like W2’s, 1040 forms and e-filing have been repressed so deeply in your mind, they barely register at all.
I totally understand. But the reality is…a little tax planning for you and your business now, could save you money and be well worth the effort later.
Following are a few tips to help you with tax-saving tools for your business.
– Review Estimated Tax Payments.
Assess what you have paid in taxes to date and adjust the remaining estimated tax payments for this year accordingly. This way you will avoid both under-payment penalties and over payment installments…resulting in a tax free loan to the government.
– Get Organized.
You need to keep close track of your deductible expenses throughout the year. If a pile is starting to accumulate, take the time to sort through your receipts and file accordingly. Organizing now will save you hours at tax time.
– Make Retirement Plan Contributions.
Contributing to your retirement plans can provide you with a significant tax break. If you haven’t started a retirement plan, you may want to consider doing this in 2011. Timing is everything.
– Take Advantage of Hiring Incentives.
If your business will require hiring an additional employee or two, the HIRE act passed in 2010 offers you a couple of incentives.
A tax break is extended to employers who hire full-time workers who were previously unemployed or working part-time. For each worker who is hired and retained for one year, the government will extend a $1,000 credit for your 2011 taxes.
These are just a few of the items to assess during a mid-year business review. There are more. But taking the time to meet with your CPA and review the items listed above will ensure you have a good understanding of your company’s financial situation and information to minimize your tax liability…and give you more time to relax poolside and sip a fruity drink – complete with a paper umbrella!
Kathi Koenig, CPA
Partner – McGowen, Hurst, Clark & Smith, P.C.