We’re now firmly in Q4 whether it feels like it or not. Although this year has certainly been like no other, December 31 will be here before you know it. That makes now the perfect time to look at your tax strategy as a small business owner and get prepared to ask some questions before 2021.
The good news: you don’t have to do this alone. As a tax lawyer, I help businesses understand the current landscape and adapt their strategy to remain in line with changes, too. Read on to learn more about some of the top things to think about as we start to close out 2020.
Does Your Retirement Plan Match Your Goals?
Often, new small business owners who have just launched are focused on generating revenue and stability- and rightly so. But if you survived this year, take a look at whether or not you have a retirement plan in place and whether you’ve contributed the max for your tax situation. Certain contributions made for you or your employees could be tax deductible. End of year is a great time to think about capitalizing on all strategies, retirement included.
Does Your Business Entity Need to Change?
There are a lot of considerations that go back to your current business entity. From deductions for service based businesses to deciding when a C corp should be your next evolution, an Atlanta tax lawyer can help. There might be changes based on federal policies heading into 2021, so make sure you set up time to speak with your tax strategist and other financial professionals now.
For these and other tax questions, make sure you have a team of financial professionals to advise you.
What’s Your Tax Outlook and Payment Plan?
Now more than ever does the statement “cash is king” apply. As a business owner, your cash flow is critical for avoiding disruptions throughout 2021. You can arrange for a credit line to handle unexpected tax obligations to set aside money now. Paying estimated taxes might be a topic you revisit if your business has previously reported losses or minimal income but has done better in recent years. Paying quarterly avoids penalties and levies from the IRS.
Even if you’re not yet ready to run all your numbers for 2020, you can get within close range of predicting what your tax obligation might be. As an Atlanta tax lawyer, I often fill my calendar getting close to the holidays with year-end strategy sessions around tax questions.
Can We Take Larger Deductions on Equipment?
If you purchase equipment that you can put in place and start using before the conclusion of 2020, you could access certain federal tax deductions meant for small busines owners. These phase out at higher spending amounts, so make sure you’ve spoken with your taxa statregist first before making any purchases. You’ll need to know how this aligns with your company and current tax obligations by asking the right tax questions.