What’s your tax strategy?

Businesses with monthly close processes, whether internal or outsourced, generate clean and accurate financial statements. A monthly close process should include the following:

• Beginning balance sheet review
• Bank account and credit card reconciliations
• Aged receivable analysis
• and much more

Most small businesses should expect a monthly close process to cost <$500/mo.

Your business is likely organized as an LLC but is it taxed as an “S” Corp, a “C” Corp, a partnership, or as a sole proprietorship? Important tax implications underlie your selection, and making the wrong selection can cost your business thousands of dollars each year.

Most businesses do not realize how much their tax liability is impacted by their accounting methods. Important considerations include:

• Cash vs. accrual
• Inventory capitalization
• Accounting for long-term contracts
• and much more

Retirement plans result in greater levels of employee retention, asset diversification, liquidity, and wealth accumulation. All businesses should determine which retirement plan is best for them, after considering their specific profitability, owner demographics, workforce demographics, and additional factors. Options include:

• Simple IRA
• Simple 401(k)
• 401(k) with or without safe-harbor match
• and many more

In many industries, tax credits and incentives are the single most important part of an overall tax strategy.

Federal, state and local governments utilize tax credits and incentives to encourage economic development. A thorough understanding of the incentives offered in your business's jurisdiction is critical for success.

Business owners often overlook the need for a tax-efficient exit strategy until it's too late. Whether you plan to sell your business to a third party or simply close the doors when you wrap up operations, your exit plan affects your tax strategy now, because each business has unique needs and considerations.

The one constant in life and business is change. Your tax strategy should be reviewed and updated at least yearly to account for any changes in your business or economic environment.