How Is Your Business Tracking For Year End?

As year-end approaches, how is your business tracking?

If your business has experienced material changes to its financial position, it’s a good idea to connect with your tax professional / CPA to review those changes to ensure alignment and mitigate against any unexpected surprises at tax time.

This can be especially helpful for first-time, first-year small business owners with pass-through entities.

For instance, you’ll want to be sure you’ve paid enough in estimated tax payments to satisfy IRS Safe Harbor rules to avoid potential tax penalties and go over any additional relevant tax strategies that may help reduce overall tax liabilities.

You may also want to go over the financial statements and documents your tax professional / CPA will require to prepare relevant tax filings.

These typically include, but are not limited to a balance sheet, income statement (P&L), year-end bank statement and bank reconciliation. Additional supporting documentation may include GL account details, year-end payroll summaries (if applicable), and so forth.

Hopefully, you didn’t take a makeshift approach to managing your business finances!

Keep in mind, if your business reports on a cash basis for tax purposes, be sure to provide financial statements on a cash basis. Likewise, if your business reports on an accrual basis for tax purposes, be sure to provide financial statements on an accrual basis.

Be proactive, not reactive!