Panel, Fireside Chat, Webinar, Other
2016 Tax Season: What small business owners need to know
- Core Theme: Small business tax season is managed effectively through year-round organization, automation, and a specialized professional team rather than ad-hoc preparation.
- Preparation Strategy: Experts advocate for automating accounting records and digitizing receipts using tools like Falcon Expenses, Hurdler, or simple smartphone apps to eliminate "shoebox" chaos.
- Professional Team Building: Small business owners should cultivate a cadre of experts, specifically accountants with industry-specific knowledge, legal counsel, and financial advisors, rather than attempting DIY tax preparation.
- Collaboration: Owners must treat CPAs as strategic colleagues, sharing future business goals and major purchases (e.g., equipment) in real-time to optimize tax outcomes.
- Capital Access: Inaccurate tax preparation can limit a business's ability to secure loans or raise capital, as lenders scrutinize tax filings.
- Regulatory Changes & Trends (2014-2015 Context):
- Same-Sex Marriage: Following the Supreme Court ruling, businesses in previously non-recognizing states must adjust employee withholding and benefits accordingly.
- Retirement Limits: IRS contribution limits for individual retirement accounts increased from $17,500 to $18,000.
- Healthcare Compliance (ACA):
- The mandate threshold for employer coverage dropped from 100 employees (70% coverage) to 50 employees (95% coverage).
- Penalty for non-compliance increased from $95 to $325 for 2015.
- Section 179 Deduction: Businesses can now deduct up to $2 million in 2015 for eligible equipment, furniture, and fixtures.
- Strategic Financial Advice:
- Retirement Planning: Beyond standard 401(k) limits, owners should consult Third-Party Administrators (TPAs) regarding defined benefit or contribution plans that allow for significant tax-deferred savings (potentially exceeding six figures).
- Cash Flow Management: Business owners must anticipate quarterly tax payments based on projected growth to avoid cash flow disruptions, particularly when weighing the cost of health insurance against the rising penalty fees.
- The "Cost of Saving": Attempting to save money by doing taxes or accounting incorrectly often results in higher costs due to penalties, lost capital opportunities, and the expense of fixing errors ("stepping over dollars to save pennies").
- Forward-Looking Actions:
- Digitization: Immediately scanning receipts and utilizing accounting software to ensure readiness for the following year.
- Continuous Dialogue: Maintaining year-round communication with banks and CPAs to align on payroll, cash flow, and growth strategies.
- IRS Resources: Utilizing modern IRS tools like the "IRS To Go" app for free, basic inquiries, noting a shift toward a more customer-friendly agency.
- Key Decisions & Disagreements: The panel unanimously advises against "surgery on yourself" regarding taxes; despite the availability of software, the risk of penalties and the complexity of small business rules necessitate professional CPA involvement.