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2016 Tax Season: What small business owners need to know
- Automating tax and accounting systems with tools such as Falcon Expenses, Hurdler, or Excel, alongside digitizing records via smartphone apps, is projected to simplify operations and enable owners to have documents prepared with minimal effort by the following tax season.
- Sharing goals, major operational moves like equipment purchases, and year-round challenges with CPA teams or advisors is expected to prevent catastrophic errors, identify special tax deductions, and resolve timing issues that positively influence business operations.
- Owners engaging with small business bankers to bring CPAs into financing discussions are projected to have increased likelihoods of securing assistance to achieve fundraising goals compared to those who do not.
- Establishing defined benefit or defined contribution retirement plans is anticipated to allow eligible small business owners to defer more than six figures, or potentially enter mid five figures, into tax-deferred savings, resulting in tax savings.
- Monitoring consistent updates regarding the tax environment and planning for quarterly tax payments is expected to prevent negative impacts on future cash flow.
- The penalty fee for lacking full health coverage is projected to rise to $325 in 2015, up from $95 in the previous year, with the requirement that 95% of a workforce in businesses with 50 employees must be covered to avoid penalties.
- Owners purchasing small equipment, furniture, or fixtures in 2015 are eligible to deduct up to $2 million under Section 179, a provision that may allow for similar deductions in the future.
- The IRS has adjusted the retirement account contribution limit from $17,500 to $18,000 for the current year, while the Supreme Court's June ruling on same-sex marriage necessitates immediate adjustments to withholding and employee benefits.
- Failure to correct tax mistakes is projected to result in significantly higher costs compared to the expense of professional help, reinforcing the financial benefit of early engagement with tax professionals.
- Consulting with the right retirement plan experts, potentially found through CPA referrals sourced from banks, is presented as a strategy to maximize tax-deferred contributions based on specific business types.