Episode Transcript
[00:00:00] Hello, and welcome to another episode of Financial Snickens. I'm your host, Alisa McCabe, and today we are talking about tax planning. I know you're saying tax planning, but you don't do tax planning. Our company does not do tax planning, but it is incredibly important. And you're probably thinking like, what?
Why would I do it now? It's fall. I know it seems crazy, but actually right now is the perfect time to be thinking about year end. The stores already know this. Look, they have Halloween stuff out and in a few weeks they're gonna have the rest of the, of the holiday stuff out in full bloom. And look, they're planning ahead.
And successful businesses do too. So as a small business owner, you know that it's important to keep your finances in order. But did you also know that tax planning is one of the most important aspects of financial management? And unfortunately, so many small businesses [00:01:00] don't do this. So we're going to talk about this and why you should do it.
So there's so many reasons to do tax planning, and it's incredibly important. But first of all, it can help you save money by planning on your taxes ahead of time. You can ensure that you are taking advantage of all the deductions and credits you're entitled to. And this can lead to a significant reduction in your tax bill.
We strongly recommend that you have a tax planning meeting with your CPA in October or November to take advantage of the actions your CPA suggests. And if you're part of our CFO, Virtual services, your CFO is going to go with you to that meeting with your accountant and help you to implement all those actions your CPA tells you to do.
Tax planning can also help you avoid problems with the IRS. If you don't take time to plan your taxes, you may end up making mistakes that could trigger an audit. Nobody [00:02:00] wants an audit. And by taking the time to do some of this tax planning, you can avoid all these potential problems. So here's our tips for successful tax planning.
Give yourself a deadline. You have an idea, you know you need to do this, give yourself a deadline. I have to have my books in order, everything ready to go. I've called the CPA by October 1st, October 15th, whatever it is, give yourself a deadline. Gather all the information that you need, and this includes income statements, receipts, and any other documents that will be relevant to your taxes.
Now, if you're working with our client with First Steps Financial, your dedicated accounting support will be able to provide you with all the reporting that you and your CPA will need. Get in touch with your accountant. Make an appointment to see them as soon as possible. Let them know specifically you wanted that advice.
On tax planning, make sure your books are clean and up to [00:03:00] date. I just did a podcast about this, like how to know if your books are clean enough today and what you do about fixing them. And basically by clean, we mean that you should be able to run a profit and loss and a balance sheet and the numbers should reflect what you know to be going on in your business.
If there's negative numbers. Something's wrong. Get help. Get it fixed. Get that tax planning. And then lastly, this is all on the business owner. Make an educated guess on income and expenses for quarter four. Use your current numbers. Use numbers from last year. Use the knowledge that you have of any new deals coming up, any new expenses that you're expecting.
Then this will give you an estimate of what's going to happen in the last quarter. Add it to your current sales and expenses that you have to date. Thank you. And then you'll have an estimate of where you're going to end up at the end of the year. Look, that is what whoever does your tax planning is going to want to know where you think you're going to end up.
So [00:04:00] there's a few different approaches to tax planning. You can do it yourself. Or you can hire a professional tax planner. If you decide to do it yourself, there's a few resources that can help you. The IRS website has a lot of great information on tax planning. And also there's so many softwares out there that can help you.
But if you decide to hire a professional tax planner, make sure you choose someone who is reputable and who has experience working with small businesses. If you make sure that you find someone, a CPA or a tax planner that has experience with small businesses, because they will be able to understand what you need.
And if you need references for CPAs, tax planners, we can certainly provide you with some. Reach out to us, head over to our website, FirstEpsFinancial. com. Get on my calendar and we can talk about [00:05:00] great CPAs that we work with, but no matter how you do it, tax planning is so important and it's important as part of your financial management of your business and taking the time to plan ahead can save yourself money and avoid any potential problems that you're going to end up with the IRS.
If you have any questions or want to talk about this more. Again, head over to our website, FirstStepsFinancial. com, and we can chat more about it.
