Mid-Year Tax Planning Checkup
By Michael Murray, North Carolina Tax Controversy Attorney
After a stressful tax season and a brief rest after all the deadlines are met, the time for a mid-year tax planning checkup approaches quickly. In July/August each year, small business owners need to reassess several processes to ensure the business is running smoothly. A mid-year tax planning checkup is the perfect opportunity for this type of assessment. This mid-year check in is not required by the IRS. It is only for your benefit. It allows you to spot opportunities and reflect on your long-term plans.
The 5 Parts of a Mid-Year Tax Planning Checkup
- Withholdings and Estimated Quarterly Payments. Make sure you are paying the correct amount of taxes during the year. This can prevent significant penalties and surprising tax bills later. If you are not paying enough income taxes through withholdings, you need to supplement with estimated quarterly payments. Calculating the correct amount depends on accurately predicting your income for the rest of the year. Quarterly payments are due April 15, June 15, September 15 and January 15. Check out this IRS article for more information.
- Entity Structure. The business entity type that you establish for your business shapes the tax process and the paperwork required. A tax attorney familiar with all types of business entities and how they are taxed can explain the differences between your options and help you select the best type for your business. Once you make a choice, they can also assist you in making sure you have registered correctly with all required state and federal agencies.
- Bookkeeping. Mid-year is a great time to audit your bookkeeping processes to ensure your records are accurate and the process for creating and maintaining these records is streamlined and efficient. Now is the time to make changes such as hiring a new in-house bookkeeper or contracting with an outsourced bookkeeper. Contact Murray Moyer, PLLC for more information on how we provide bookkeeping services to North Carolina small businesses. Check out our blog post, Bookkeepers Help You Get Back to Business.
- Update Income and Expense Records. You need clear income records for calculating your total income for tax liability and you need accurate and up-to-date expense records for claiming deductions. Record tax-deducible business expenses as you go. The mid-year tax planning checkup should reflect that all of these records are up to date so far for this tax year.
- Line Up Professionals. Make sure you have the bookkeeping services you need for your business as well as tax preparers and tax attorneys. Do your research mid-year and sign your professional services agreements with these providers now so that you are not scrambling at the end of the year.
Work out these issues during the mid-year off season to prevent feeling rushed and stressed later. Contact the experienced professionals at Murray Moyer, LLC for assistance with a mid-year tax planning checkup.