These are the main three things to look for when figuring out if your business is paying too much in taxes.
Here at Kerby Accounting & Business Solutions, we help lots of clients prepare their tax returns. Where it’s important to pay the IRS on time, it’s also important to be sure you aren’t paying too much in taxes. (That potential payment overage is money you could be using to invest in new equipment, add new hires to your team or launch a marketing campaign, after all.)
Here are some situations that we are always happy to point out and help rectify — keeping more money in business owners’ pockets:
Your company is listed under the wrong business entity. Having a business structure category that is not the best fit for your company — taxwise — is common, fixable and can fluctuate, depending on what is happening with your organization at any given time. Whether your business is a corporation, sole proprietorship, limited-liability company (LLC) or S corporation, each category brings its own legal, tax and fiscal considerations. It’s a matter that should be regularly analyzed by a qualified accountant and attorney. If we decide a switch will save you money? Kerby Accounting will take care of it.
You don’t track business expenses. It may not seem like the coffee you bought during a break in a professional conference or the fact that you bought a new piece of office equipment is that big of a deal. But business expenses add up quicker than you may think and are tax deductible, meaning, they offset what you owe in business taxes. Keep receipts. If you aren’t sure if an item is tax deductible? Keep your receipt anyway and ask your accountant.
You pay your taxes late. There are some companies that are routinely late paying business taxes. New business owners who are self employed may even assume they pay on April 15 like individuals or other businesses and aren’t subject to quarterly tax filings. Not only does a late-payment habit set late fees and interest charges in motion, it also could make your company more liable for an IRS audit. Paying on time costs less; your accountant should keep you on track with tax filings and payments.
Work with your accountant to figure out what more you can be doing to lower your business-tax rate. Here at Kerby Accounting, we are always glad to meet with potential new clients to answer these questions and others. Call us today for a free consultation.