Prepare For Next Year’s Tax Season

Forbes Finance Council members provide insights into proactive measures that companies can undertake to prepare for the upcoming tax season. The 17 recommended strategies focus on optimizing financial processes and ensuring a smooth tax compliance process. Key recommendations include:

1. #1 – Engage Stakeholders:

2. Collaborate with stakeholders to assess the previous year’s tax process. Identify areas for improvement, and enhance collaboration for effective tax planning. – Matthew Barbieri, Wiss

3. #2 – Reallocate Assets:

4. Strategically reassess portfolios by categorizing accounts. Such as brokerage, tax-deferred, and tax-free, to inform decisions on asset allocation. – Charlene Wehring, DBHW Wealth Partners

5. #3 – Review Quarterly:

6. Conduct quarterly reviews of the last tax report, identify exposures and liabilities. Implement effective document management systems for financial transactions. – Oluwatoyin Aralepo, Mastercard Foundation

7. #4 – Hire Professionals:

8. Assemble a skilled accounting team, including tax professionals, bookkeepers, and strategic advisors, during slower summer months to ensure readiness for tax season. – Julie DeLong, Backyard Bookkeeper

9. #5 – Plan Ahead:

10. Stay informed about upcoming changes in tax laws, plan for future tax years. Adjust processes and reporting to align with new requirements. – Michelle DeBella, JumpCloud

11. #6 – Communicate Often:

12. Maintain year-round communication with tax advisors for effective tax planning. Allowing them to identify tax-efficient paths forward for major business decisions. – Amanda Han, Keystone CPA, Inc.

13. #7 – Document Expenses Appropriately:

14. Save time and money by understanding state tax laws, adjusting early, and documenting expenses throughout the year to maximize deductions. – David Kelley, Diesel Laptops

15. #8 – Arrange Meetings:

16. Regularly meet with certified public accountants or bookkeepers for quarterly or semiannual check-ins to discuss current situations and implement tax-efficient ideas. – Letitia Berbaum, The Zandbergen Group

17. #9 – Review Write-Offs:

18. Invest in business growth, attend events, and build relationships with clients while consulting with accountants to identify tax write-offs for incurred expenses. – Christina DeSimone Nappi, The DeSimone Agency Inc.

19. #10 – Analyze Options:

20. Explore business structures, such as S Corps, and consider investing profits in real estate to leverage tax benefits like depreciation write-offs. – Leo Kanell, 7 Figures Funding

21. #11 – Build Relationships:

22. Establish year-round relationships with tax professionals who offer advisory services, providing insight and tax strategies for long-term business success. – Barry Pennett, Intuit

23. #12 – Track Categories:

24. Implement mechanisms to track nexus (minimum connection to a state for income tax filing requirements) and key categories like revenue, fixed assets, and payroll. – Geanette Rodriguez-Ojeda, GRO Accounting and Tax

25. #13 – Be Thorough:

26. Meticulously maintain financial statements for future tax benefits and prepare forecasting scenarios for discussion with CPAs. – Robert Reeder, GlassView

27. #14 – Utilize High-Yield Savings Accounts:

28. Set up auto deposits to high-yield savings accounts to keep capital liquid and earn better returns, aiding in setting taxes aside. – Drew Gurley, Redbird Advisors

29. #15 – Consider Relocating:

30. Explore relocation to states with favorable tax regulations, such as Texas, Nevada, Utah, Connecticut, Colorado, and Washington. – Guadalupe Rodriguez, Talipot Holding

31. #16 – Implement Automation:

32. Prioritize accurate year-round financial reporting by implementing digital automation to streamline manual processes and achieve a faster closing. – Omar Choucair, Trintech

33. #17 – Secure Continuity:

34. Ensure continuity with tax preparers for the next year, avoid becoming a problem client, and agree to fair pricing to avoid last-minute searches for new help. – Chris Tierney, Moore Colson CPAs and Advisors