For many business and practice owners in Houston, this has been a challenging year because of the pandemic and oil & gas downturn affecting the city’s economy. That’s why the fourth quarter is the ideal time of the year to think about year-end tax planning to help smooth things out before filing your annual tax return.
We can help by gaining an understanding of your business. With over 25 years of experience as tax CPAs in Houston, we know the ins and outs of filing Texas business statements. Let’s review what you should focus on.
Tax Planning Focus for Houston Businesses
Fixed Asset/Section 179 Depreciation Purchases.
- These are purchases or leases used to help you run your business.
- Purchases can include copy machines, desks, or even a vehicle.
- Items are deductible when using the proper tax forms and paperwork.
Evaluate Income and Tax Deposits Year to Date.
- Have you deposited enough throughout the year?
- Form 1040-ES should be used to estimate your business tax.
- Small businesses, partners, and S Corp shareholders expecting to owe more than $1,000 in taxes need to file using the form.
Consider Your Goal for Retirement Plan Contributions.
- Do you have adequate cash?
- Consider a cash balance plan for you and your employees.
A cash balance plan can reduce your taxes as well as pay you at the same time. Working very much like a traditional, defined benefit plan and sharing some benefits with 401k plans, a cash balance plan can potentially give your business more flexibility while reducing your tax burden.
Establish Monthly Accounting Processes to Help With Taxes
Are you confident in your monthly accounting processes? Working with our CPA firm, we’ll help you tap into the best available planning and resources tools, which pays off at the end of the year during tax planning. Here are the tools we use.
1. We Use a Standard Chart of Accounts.
This is the numbered list of accounts used for your company’s financial books. Think of this as a sophisticated filing system that can be used to categorize things such as assets, expenses, operating costs, revenue, and many other factors that constitute your business.
2. We Evaluate Cash In and Cash Out Each Month.
By keeping track of incoming and outgoing expenses, you’ll know exactly where and how your business’ money is being spent. A monthly summary of spending will keep you on track to accomplish your goals instead of wondering where your money is and whether you have available funds to make tax payments.
3. We Prepare Tax Basis Financials Each Month.
We want you to know where you stand on taxable income for the year. This helps with estimated quarterly tax payments and helps us find opportunities to help you save money throughout the year. You can also plan for major events such as future expansion, adding new equipment, and more.
4. We Evaluate Tax Obligations Twice a Year.
No one likes a surprise tax bill from the IRS. We help you avoid big surprises at tax time through tax planning and reviewing your tax obligations throughout the year. That’s why it’s so important to work with a CPA in Houston that understands your business. Then, we can help you make smart decisions that reduce your tax burden.
Here to Help with Tax Planning
It’s no mystery that keeping score of your tax standing is difficult. We do the heavy lifting for you by keeping up with changes to tax laws, retirement benefits, and more that impact your tax bill.
We do more than taxes, though. We can help you grow your business or practice through a consistent approach that meets your goals.
- For dental and medical practices, we offer specialized services such as our Practice Made Profitable program.
- For business owners, we provide business advisory services that fit your unique needs, industry, and growth objectives.
Reach out to us today to discuss tax planning and how we can help you grow. We’ll meet you where you are, keep score, and give you the tools to create a profitable practice or business.
Call us. We can help.