Small Businesses Should Start Tax Planning Today

Small Businesses Should Start Tax Planning Today

It's barely mid-November at this point, and entrepreneurs - including farmers and truck owner operators - are more likely thinking about their holiday plans than their companies' tax status.

However, even though the filing deadline is still months away, most small business experts agree that the best time to get a head start on tax planning is "all the time."

Tax planning and strategizing should be a year-round effort on the part of small business owners and their tax specialists, but that's obviously not always going to be possible for an enterprising Canadian who's busy with the work of simply running their operation and making sure everything goes as smoothly as possible.

Generally, though, those who have put off tax planning for the majority of the calendar year should get a jump on doing their prep work (at the very least) as soon as possible.

Why Is It A Good Idea At This Time Of Year?

The simple reason that most tax experts will tell small business owners to start their planning and prep efforts far in advance of the tax filing deadline is that it simply gives them more time to work on it.

The farther out they start on these efforts, the less time is required to devote in a given work day or week - on average - to making sure all their Ts are crossed and Is are dotted.

Right now, in mid-November, that would give owners about 5.5 months to really work on their taxes for a little while each week, meaning that you can still devote a lot of time to other aspects of your companies without also potentially putting you in a position where your tax filings or documentation might end up being problematic in some way.

In addition, preparing tax filings months in advance can also give owners the added benefit of helping to spot potential issues even before the end of the year, allowing you to do a little bit of course correction and make sure that everything is as it should be.

That further helps to avoid scrambling in the final several weeks before the deadline, reducing the amount of work-related stress during that period, which can often be trying and nerve-wracking even for seasoned small business tax prep veterans.

A little tax prep work will typically go a long way for any small business owner at this time of year.A little tax prep work will typically go a long way for any small business owner at this time of year.

Formulating a Good Plan - With Help

The reason it's often such a good idea to contact a tax professional ahead of the end of the year is that any last-minute tax planning that needs to be done to reduce liabilities and increase the value of potential deductions or credits can possibly be completed.

For instance, farm owners or truck owner operators who are planning to make an equipment purchase might find that it's wiser to make that purchase now than doing so next year, when the various ins and outs of the Canadian tax code may change.

Of course, what's right for each individual entrepreneur is obviously going to vary widely, but working with a tax pro - especially one with a long history of working with businesses in your industry - will likely go a long way toward helping you determine what's best for your business both in the short and long term.

In addition, though, that logic (which can certainly be applied to a company's tax situation now, before the end of the calendar year) applies earlier in the year as well.

The fact of the matter is that the farther out from the filing deadline a company can work on its tax preparation overall, the better off it's likely to be when April 30 (or June 15 for self-employed individuals) finally rolls around, because there will probably be no real reason to be worried about what the government might find.

Working with a tax pro throughout the year can not only help to make the filing process easier to handle overall, but also to possibly identify potential issues months before they actually arise, and put together a plan for avoiding or smoothing them over altogether.

How Can This Be Done Quickly And Easily?

When a small business owner starts working with a new tax specialist, they may have to do a little preparation before the preparation, so to speak.

That will typically mean rounding up all of the financial data you think is pertinent to your filing situation (and really, you should check with your tax preparer about what you will and will not need to provide), and making sure it's all organized, easy to understand, and as complete as it needs to be.

While that might not matter much to the tax preparer in question - many are more than accustomed to dealing with nightmarish paperwork from disorganized business owners - it's important to put in this kind of work beforehand, since it will probably end up going quite a long way toward avoiding potential mistakes.

That's because owners who just dump a pile of papers on a desk are far less likely to notice that they're missing a necessary receipt or other type of paperwork than those who meticulously comb through all the documents at their disposal and make sure everything is organized and where it should be.

All that work, in turn, would likely be helpful to the tax specialist when it comes to identifying areas where the farm owner or truck owner operator may be able to do a little more to improve their tax standing, and potentially maximize their deductions and credits while reducing their obligations.

What Steps Should Come Next?

But even after the tax prep effort is started here, work should likewise begin on formulating a more long-term tax plan than just the 2015 filing season.

Again, this kind of effort will likely go a long way toward helping businesses find a potentially larger amount of "wiggle room," so to speak, when it comes to making sure you're doing everything you can to streamline your tax situation.

Having an ongoing tax plan - which isn't going to be set in stone by any means, but will provide plenty of guidelines by which businesses can operate on a long-term basis - can be a major boon for companies looking to save a potentially large amount of money on tax filings every year.

Moreover, having a tax specialist to consult with and talk about past and future issues on a regular basis should be a crucial part of that long-term plan as well.

This is because these professionals tend to do their best work when they have a deep and ongoing understanding of how any company with which they work operates.

Building this kind of relationship over the course of one tax season can be extremely beneficial to a farm owner or truck owner operator - but over the course of several, it can be invaluable.

For that reason, getting a head start on work for the upcoming filing season now will not only help to get things organized for tax season in 2016 but also in 2017, 2018, and beyond.

FBC knows how confusing it can be gathering tax documents. That's why we come to you, so you don't need to transport all the paperwork into our office and nothing is missed or forgotten.

Plan Now to Reduce Taxes in April

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