Each year, businesses have housekeeping to do as they prepare for new operations, and taxes can take up most of the work. Reporting finances appropriately is important to all companies, especially if you want to avoid an audit or other tricky situations.
Each year there will be updated forms and revised filing requirements and tax rates to consider. The schedule for making payments may also have been tweaked, so readjusting calendars is critical. As a safety net, companies should research the changes first and make sure all their own finances will be reported accordingly.
Plus, they should integrate their inventory management software with their accounting software, such as Fishbowl and QuickBooks. This keeps inventory and accounting records in line with each other and saves businesses a lot of trouble down the road at tax time.
The Internal Revenue Service is consistently trying to cut red tape with paper reduction. This exercise leads to some forms being discontinued and others becoming more streamlined. The need for less information to report revenue is the biggest factor for updated forms. In addition, technology has made it easier to download and submit them online. Look to see if your own company can cut back on wasted time and forms.
Individual tax returns are due at the same time each year. However, business filings are based on the type of tax. For example, income tax is paid in the form of estimated tax payments four times per year, although weekly, bi-weekly, or monthly payments are accepted if the amount due is current at the end of the normal cycle. Failure to meet this burden will result in a penalty.
Changes to Tax Rates
Legislation is always being revised when it comes to tax rates for businesses, and is based on the ebb and flow of budgets. This is true for local, state, and federal jurisdictions. Companies must use due diligence to stay informed about these changes. Examples include employment and excise with the latter based on the type of business activity.
The IRS strongly recommends businesses use the EFTPS or Electronic Federal Tax Payment System for all payments. This streamlines the process with time stamps while reducing paperwork. Companies that use a check stub creator online tool will find the process even more efficient. You can learn more here about how these tools generate a document from the dedicated account paying the tax. This option also facilitates the ability to include the important company identifier EIN on all payments.
Hiring a Tax Attorney or Accountant
Most businesses take the prudent action of hiring a tax professional, such as a tax attorney or accountant, to handle this obligation. It is not unusual for this to be a long-term partnership that offers benefits, including a running history that serves as a benchmark for budgets. However, some companies opt to have in-house personnel to tackle this responsibility.
While changes to business taxes are generally not wholesale, the responsibility to adhere to the specifics is a serious one. Structuring finances to align with all levels of government criteria will ensure any changes are met seamlessly. This translates into utilizing efficient processes such as online payment tools and partnering with a professional.