A mid-year business tax assessment may be in order

Many Illinois business owners may feel that it was just yesterday that they were dealing with income taxes for last year, and the last thing they want to think about during the summer is taxes for this year. However, it is already more than half way through 2014, and the end of the year could creep up before anyone realizes it. Therefore, a mid-year business tax assessment may be in order in an attempt to forestall any surprises when the next tax season rolls around.

This review could begin with scrutinizing financial records from Jan. 1 through June 30. If revenue has significantly increased or decreased from last year, this could be a sign that some decisions need to be made when it comes to tax preparation. At the very least, it may be necessary to either increase or decrease estimated payments.

In the alternative, it may be time to consider some more permanent tax saving strategies. Providing benefits to employees such as a retirement plan could help reduce the amount of taxes the company will owe by diverting funds to a tax-deductible enterprise. Further, employees will receive a valuable benefit for which the employer does not have to make payroll tax payments. Purchasing equipment or other items for the business may also help lower a company's tax bill.

Planning ahead could save an Illinois small business thousands of dollars in hard-earned money that would otherwise end up being paid as business tax. Now is the time to conduct a review in order to institute plans over time without have to rush at the end of the year, which could lead to ill-advised business decisions. Seeking advice regarding the best options for a particular business could optimize a business's tax structure now before it is too late to save money next April.

Source: Fox Business, "5 Tax Planning Tips for Your Small Business", Bonnie Lee, July 11, 2014

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