Small Business Tax Help Never More Critical than from 2021 Forward
While owning a small business has always been exciting and almost always financially rewarding, the challenges to success seem to be multiplying. With the entrance of various tax initiatives in response to COVID, business tax returns have become more complicated.
With trillions of dollars in spending bills working their way through Congress, the wheels are turning to find ways to fund that spending. Among many initiatives, there are proposed plans to raise taxes on business and high income individuals. Another proposal in discussion is $80 billion in new funding for the IRS, with $60 billion of that going to enforcement activitiesi.
That is some of the “glass half empty” news about small business taxation. The “glass half full” news is that when the taxing agency comes up with new ways to take your money, there are inevitably new ways in which to take advantage and save tax dollars. As a small business owner, you can just settle back and pay the tax bills, or you can take action to claw back far more tax dollars than the cost of small business tax help. That help involves:
- Informed bookkeeping – Too often, business owners look at bookkeeping as a necessary function of posting income and expenses to forward to tax preparers at tax time. While that is their primary function, there are changes in tax laws and forms constantly that change the way those income and expense records should be reported. A bookkeeping function does a better job if continually informed and monitored by business tax professionals keeping them up to date with IRS requirements.
- Tax preparation – Following up on the bookkeeping function is the actual preparation of the returns. Every year there are multiple changes to required forms and the entry items on them. Tax preparers every year must inform their clients that want to file early that they must wait for information from the IRS before they can submit returns. As an integral part of a bundle of small business tax help services, tax preparation will be more accurate and keep the business out of tax trouble.
- Tax planning – Tax planning has never been more important in small business tax help than now. There are decisions small business owners make in the areas of major purchases and business expansion. They can have short and long term effects on taxes paid. Planning for growth and major expenditures is an effective tax minimization strategy.
- Audit response and representation – Overseeing all the above functions and providing guidance when changes are in the works is how to keep the IRS from your door. However, if for no other reason than the IRS penchant for changes, your business can get a notice of audit or formal questions from the IRS. Your small business tax help should include guidance to avoid audits and representation with the IRS if they question your return.
Think of small business tax help as integrated services that support each other for your benefit.
i IRS could raise $200B in revenue, double its workforce under Biden spending plan – FederalNewsNetwork.com