Year end is a crucial time for a company. The books area getting ready to close, and the taxpayers have to be aware of crucial steps they have to take before the clock strikes midnight on New Years Eve. While most tax advantageous avenues, like pension plans, have time until tax returns are due, when it comes to maximizing on business expenses and legally minimizing taxable income of a company, time is of the essence. Companies that carry inventory or products for sale may want to buy some stock ahead of Dec 31 to increase expenses. You pay want to prepay advertisement, subscriptions or other expenses that may have been due in January, to take the expenses in the current year. Payroll is important too, are you paying yourself enough and what is your salary/dividend/loan-to-shareholder ratio? With increased scrutiny from the IRS, it's important to know how much is too much or too little. Paying some payroll tax now is far less expensive than taxes, interest and penalties later, if your dividends get reclassified as payroll by the IRS. This can be quite painful...
Your accountant and/or tax professional will know the little things to look for and steps to take in time to ensure you're all set when tax time comes.
Happy Holidays!
December 14, 2009
August 4, 2009
New Due date for Partnerships
This year the Partnerships filing form 1065 only have till September 15th to file their 2008 tax returns, as opposed to October 15th deadline in previous years.
Per IRS.gov -
"Extension Due Date for Most 2008 Partnership Returns is September 15, 2009
Only a 5-month extension is available for 2008 partnership returns filed in 2009. See 2008 Form 1065 instructions page 4 "When to File" and the instructions to 2008 Form 7004 Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and other Returns."
I am sure this is a way to accelerate tax revenues collection on accounts that are on extension and have not sent in estimated payments when they applied for the extension back in April. As we know, tax payments are always due on the due date, there are no extensions to pay the tax. But alot of people are confused and assume that the extension gives them time to pay as well as file. This results in penalties and interest added to the tax due, when the payments is finally sent with the return. I always advise my clients to send in what it due, or an estimate, to avoid fees later down the road.
This year the returns on extension have only 5 months instead of 6 to get the financial statements completed and ready to file. I provide timely bookkeeping service to my clients to ensure no extensions are ever necessary. Your current accountant should be sending you reminders and updates to ensure your books are up to date and ready to go in time.
until next time
Natalie
Per IRS.gov -
"Extension Due Date for Most 2008 Partnership Returns is September 15, 2009
Only a 5-month extension is available for 2008 partnership returns filed in 2009. See 2008 Form 1065 instructions page 4 "When to File" and the instructions to 2008 Form 7004 Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and other Returns."
I am sure this is a way to accelerate tax revenues collection on accounts that are on extension and have not sent in estimated payments when they applied for the extension back in April. As we know, tax payments are always due on the due date, there are no extensions to pay the tax. But alot of people are confused and assume that the extension gives them time to pay as well as file. This results in penalties and interest added to the tax due, when the payments is finally sent with the return. I always advise my clients to send in what it due, or an estimate, to avoid fees later down the road.
This year the returns on extension have only 5 months instead of 6 to get the financial statements completed and ready to file. I provide timely bookkeeping service to my clients to ensure no extensions are ever necessary. Your current accountant should be sending you reminders and updates to ensure your books are up to date and ready to go in time.
until next time
Natalie
July 11, 2009
Mid-year Planning
Summer is time for relaxing, spending time with the kids and going on vacations. But for a small business owner, this is also time to review the books for the first part of the year and think about what the second half is going to look like. Items to review -
- Revenues
- Expenses
- Payroll
- Benefits
Some considerations - are my revenues going to decrease or increase towards the end of the year? Will I need to adjust my payroll up or down? Or - start taking payroll if I only took out Dividends so far? Will I have Profit that will have possible tax consequences?
Mid year tax planning does not have to be tedious, and will surely save time (and money) at tax time. It is always cheaper to plan ahead than to having to play catch up.
Comments or questions?
- Revenues
- Expenses
- Payroll
- Benefits
Some considerations - are my revenues going to decrease or increase towards the end of the year? Will I need to adjust my payroll up or down? Or - start taking payroll if I only took out Dividends so far? Will I have Profit that will have possible tax consequences?
Mid year tax planning does not have to be tedious, and will surely save time (and money) at tax time. It is always cheaper to plan ahead than to having to play catch up.
Comments or questions?
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