1. Plan a year ahead, not behind.
Don’t extend unless there is a tax benefit. Talk to your business focused CPA. See How to Create a Tax Plan for 2019.
2. Understand the Changes to the tax code:
The 2017 Tax Cuts and Jobs Act implemented the biggest change to the U.S. Tax Code in 30 years. Check out this article to get an understanding of those changes: Everything you need to know about the 2017 Tax Cuts. Talk to your knowledgeable CPA if you have further questions about the tax changes.
3. Hire business specialized advisors, not just the family used CPA.
Interview at least (3) firms, not just local ones and definitely not the first one you find. We have a list of questions on our website to help quality your CPA firm (Questions to Ask When Hiring a CPA).
Important skills of a firm include:
- Business Expertise
- Communication Skills
4. Maintain accurate records
The most expensive tax deduction is the one you miss due to poor recordkeeping and accounting. We put together an article that focuses on the 8 Deductions Most Often Forgotten by Business Owners. Our main objective at Green Ledger CPA is to provide real-time, accurate books and to take this burden off our clients so they can enjoy their journey as business owners.
5. Do not focus on the small percentage the IRS takes in taxes.
In the US, most individuals are at 0-25% marginal tax rate – what are you doing with the majority 75%?
View this article on How Paying Zero Taxes Harms Your Business.
- Successful business owners do not worry about how to maintain zero profits, but rather are more concerned with how they invest their profits.
- Your CPA should understand how to maximize profits through growth while minimizing taxes but are not concerned with getting a zero-dollar tax bill.
- Change your mindset to realize that a tax bill means you are profitable – but you still need to tax plan. Talk to your business specialized CPA.
- Reference. (2016 IRS Individual Stats – https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-tax-rate-and-income-percentile)
This publication is designed to provide information of federal tax and accounting laws and/or regulations. It is presented with the understanding that the author is not rendering legal or accounting services.
This text is not intended to address every situation that arises or provide specific, strategic tax and/or accounting planning advice. This text should not be used solely to answer tax and/or accounting questions and you should consult additional sources of information, as needed, to determine the solution to tax and/or accounting questions.
This text has been prepared with due diligence. However, the possibility of mechanical or human error does exist and the author accepts no responsibility or liability regarding this material and its use. This text is not intended or written by the practitioner to be used and cannot be used by a taxpayer or tax return preparer, for the purpose of avoiding penalties that may be imposed.