Now that we’ve reached the mid-way point of 2011, it’s the perfect time to revisit the financial and tax end of your small business or startup! Too often, business owners wait until the end of the year to think about taxes, but if they take a closer look sooner in the year, they can reap the benefits for the current tax season instead of just next year’s season.
Nellie Akalp recommended some key factors for business owners to take a close look at mid-year approaches with a financial manager and accountant.
- Re-evaluate Business Entity – Making sure your business structure is the best entity to give business owners the most bang for your buck and to have as minimal tax responsibility as possible. Also, note that to change a business entity it is not retroactive, but the sole proprietorship can still function under the newly formed business entity if desired by filing a fictions business name filing. If a new business is not desired then the books can be closed. Don’t comingle because that can raise eyebrows.
- Meet with CPA – Make a mid-year appointment when you'll both have more time to discuss your financials.
- Review Estimated Tax Payments for 2011 and take charge of your record keeping related to your salaries, contribution amounts, etc.
- Know Your 2% Reduction. According to Akalp, Legislation passed in December 2010 included a temporary 2% reduction in the Social Security retirement component of FICA employment taxes (for employees) or the Social Security portion of your self-employment taxes. Think about earmarking those extra dollars to paying down any high-interest debt, making an extra contribution to your retirement plan, or investing in your business (equipment, advertising and software.
This information is courtesy of Nellie Akalp, the CEO and Founder of CorpNet.com.