9 Tax Tips for Ending the Year
- December 12th, 2014
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The next month is so difficult for small business owners with fiscal responsibilities and holiday festivities. Between the family get-togethers and holiday parties, small business owners can get incredibly drained, not to mention closing out projects at the end of the year and prepping for the upcoming year. Although the upcoming weeks can be hectic these tax tips can put you in good shape can put you in good shape for closing out 2014, and in a great place for bringing in 2015.
Tax Tips for Finishing Off 2014
1. Change your Business Structure
For many small businesses, the journey began as a sole proprietorship (one owner) or a general partnership (multiple owners). Over time these businesses outgrow their basic business structure. In order to protect your personal assets, have added flexibility and potential tax savings, you may decide to incorporate or form a Limited Liability Company (LLC). As a tax tip, before the end of the year or in early January is the ideal time to submit your company formation paperwork.
2. File any company changes with the state
Whenever changes are made to your Corporation or LLC’s information you must update the state or other local agencies of the changes. These changes of information include, but are not limited to;
- Change of business address
- A board member leaving
- A board member joining
- Change of the business name
For most states this type of paperwork is called “Articles of Amendment”. Although filing is not necessarily a time-sensitive matter, the end of the year is a great time to catch up and make your official records current.
3. Review estimated tax payments for the year
Getting to the end of the year is a great time to get a handle on how much you will make for 2014. It’s also a great time to assess the estimated quarterly tax payments you’ve made so far. Figure out if you are on track. You will want to know whether you are over or under so you can adjust your final payment. A little tax tip for those previously uninformed, your final payment is due in January.
4. Update your contractor’s W-9s
Do you have a contractor you’ve paid more than $600 this year? If so, you are required to report this to the IRS. Make sure you have current W-9 forms on file for your contractor before the year ends.
5. Hold your corporation’s annual meeting
If you incorporated your business you are required to hold an annual meeting with your shareholders, before the year ends. Along with the meeting, you will need to generate meeting minutes signed by the shareholders. Although LLC’s aren’t required by law to hold annual meetings, if you wrote in an annual meeting into your company’s documents however, make sure you hold the meeting before the year ends.
6. File your annual report
If you have incorporated or formed a LLC you will need to make sure you’re following your state’s requirements for an annual report filing. For New York, the state requires you to file every two years. For more information about annual filing with New York here is a link.
7. Evaluate your retirement contributions
If you are self-employed, you are 100% responsible for your retirement savings. If you have not been contributing the maximum to your qualified or individual retirement plans, check out your budget and see if it is possible to channel extra money into your retirement account. If you are having trouble allocating extra into your retirement account, consider setting up an automatic contribution for 2015 to keep yourself disciplined and help your savings.
8. Make large purchases
If your revenue is greater than expected, consider ways to increase your business expenses and deductions. The end of the year is a great time to make big purchases you’ve been debating, so you can write off the expense under this year’s taxes.