As we enter a new year, and wrap up 2014 tax season, it is always good to get out in front of tax issues. Two strategies that small businesses can take to save some heartache at the end of 2015 are below.
The first strategy concerns payment of taxes. Small business owners are usually left owing money when year end comes based on their profits from pass through entities. A solution is to set up a separate checking account just for taxes. This way as the year progresses, business owners can transfer funds into this account to help make sure there are funds available to pay their year end tax liabilities.
The second strategy concerns being audited. It is a good practice to have a document retention policy in place so that if an audit occurs, all documentation needed will be available. Also, when sending in tax returns and forms, always request a Certificate of Mailing for the documents/forms so that you have a record of sending the documents and retain these based on your retention policy.
Please email or call the professionals at Somerset to assist with your tax needs and questions.