Welcome to part 3 of our series on “Making the Tax Cuts and Jobs Act Work for YOUR Business.” We’re looking at survey results from small business owners and showing you how to navigate past any bad information that’s currently circulating through the financial world…
So you can take full advantage of new tax laws, avoid “tipping” Uncle Sam, and march through tax season with complete confidence.
In the last article, we discussed the question of “Is Your Financial Team Equipped to Minimize Your Taxes Under the New Tax Cuts and Jobs Act?”
In this article, we’re going to show you how to guarantee that you won’t get an unexpectedly large tax bill this April.
What’s Going On Here?
Quickbooks Payroll surveyed 600 small business owners throughout the U.S at the end of 2018 to find out how they deal with tax season and what they think of the new tax laws.
It’s no surprise that they found 42% of entrepreneurs and professionals say the most stressful part of taxes is planning ahead for what they’ll owe.
Furthermore, 29% say the most stressful aspect is bracing for any possible financial burden it will cause their business if they wind up owing the IRS more than expected.
We get it. If you don’t have a “war chest” set aside to defend yourself from financial predators, lawsuits, and hard times, then unexpected expenses like a large tax bill can be crippling.
3 Things You MUST Do To Eliminate Ugly Tax Surprises & Avoid Overpaying on Taxes This Year
Tip #1 – Get a Good Bookkeeper
Did you know that bad bookkeeping is one of the top 3 causes for business owners overpaying on taxes?
It’s true, so don’t overlook this easy fix. Get a bookkeeper. Doing so will help your CPA avoid missing things.
There are additional benefits to good bookkeeping such as:
- Reduces your tax preparation bill
- Streamlines a tax audit when it occurs
- Helps your tax professional find new tax-saving strategies
- Avoids local and federal reporting requirement violations
- Detects financial fraud within your business (if you have employees)
- Frees up your time to work on activities that grow your business.
If you’re a small business, any bookkeeper is better than none, and with a simple Google search, you can find someone certified in Quickbooks for about $100/mth.
They’re a critical team member that will save you headaches and taxes, and help you grow your business faster. More on how to build a coordinated financial team in “Big Move #5”…
Tip #2 – Schedule Quarterly Meetings With Your CPA to Avoid Owing at the End of the Year
If you’re like most business owners, then sometime around the beginning of December you start to panic a bit.
Are my books in order?
Was I smart with my expense write-offs this year?
Will I have a big tax bill in the spring and should I save more now?
However, there’s an easy fix you can implement right now:
Schedule quarterly meetings with your CPA.
You can even automate the process so you don’t have to think about it.
Simply open up your calendar right now (we like Google Calendar or iCalendar) and create events on April 30, June 30, September 31, and sometime in the first week of December. Label them “CALL CPA – OPTIMIZE TAXES”.
This simple reminder system will make it easy for you to proactively plan your tax strategy and save as much as possible this year.
Not to mention the extra sleep you’ll get knowing that your taxes are organized and optimized!
Things to talk about on your quarterly calls:
- Quick review of current strategies you’re using
- Any major changes in income or expenses
- New tax strategies that may apply
- Adjustments to your estimated tax payments to avoid an unbalanced return
A good CPA will appreciate your communication and dedication to a solid tax strategy, and may even find additional savings as you get to know each other better. It’s a win-win, and something we highly recommend taking action on now.
Tip #3 – Use a Tax Journal or Expense App For Full Visibility
Our final tip for making financial organization effortless is to use a tax journal or a business expense app to keep track of your expenses in real time throughout the year.
You can access these apps on your mobile phone, making it easy to check in every week and see where your money is going. With the right expenses, you can actually spend your way to wealth…
But if you have a lot of “destructive expenses” (ie: spending on vices, or products/services you don’t use or don’t add value to your life), then this type of visibility will help you quickly identify “cash flow leaks” so you can plug them instantly… and redirect that cash to something more productive.
Your Next Steps
These 3 simple practices will make financial organization effortless in your business, and help you sleep better at night knowing that you won’t have any ugly tax surprises.
The number one thing you can do as you move through this series of articles in preparation for tax time is to download our free “Ultimate 2019 Tax Savings Guide” here.
Then make sure you put these 3 simple practices in place and start using them NOW.
Work with your tax team to add any additional strategies from the Ultimate 2019 Tax Savings Guide that apply to YOUR business.
Reducing your tax liability can be one of the quickest and easiest ways to instantly inject new cash flow into your life.
That’s why it’s one of the first things we handle when helping our clients with their personalized Financial Blueprint in our high-level FastTrack program.
Reducing your taxes is just the tip of the iceberg in building a bulletproof wealth plan.
The next step is to get plugged into a world-class network of financial professionals —
Which is why our 1-on-1 clients get access to the same team that personally handles Garrett’s finances.
And the full team isn’t just for taxes.
It includes a comprehensive financial team that works together on your behalf covering every aspect of your financial life, from asset protection to insurance optimization to estate planning to cash flow optimization… and even includes a Registered Investment Advisor.
If that sounds like something you’d be interested in…
That’s it for this week.
Build the life you love,
The Builders at Wealth Factory