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Spring is here…and so is Tax Day!

On Behalf of | Apr 4, 2017 | Firm News

As the calendar flips to April, we tend to turn our attention to rites of spring: melting snow and warming temperatures, the return of baseball, and of course taxes. Working with so many small businesses, we at Kennelly Business Law are often enlisted to help our clients as they prepare for their tax filing, providing advice on a litany of federal and state tax issues. When it comes to tax time, we typically focus our advice for clients on a few key areas:

  1. Proper planning is key – to maximize your final outcome, business owners must take into consideration their tax implications throughout the year as they make operational decisions. This should not mean a scramble in early April, but monthly review of activity, as well as keeping diligent records of expenses and receipts that could impact your tax liability.
  1. Build your team in advance – even if it is your first year in business, you need to have experts to help you manage your paperwork, records and actual tax filing. This should include a well-regarded accountant and tax lawyer, depending on the size of your firm. Many larger firms will also have an in-house expert, be it their CFO or VP of tax and finance. Don’t wait to build this team; if you’re calling accountants in April, you have fallen dangerously behind schedule.
  1. Strategic decisions – working with your tax team, it will be important to consider any asset acquisitions that could fit well with your business’ operation and tax strategy. Growth by acquisition can build market share and customer base, but can also impact your tax liability. Make sure your growth strategy is in line with your tax strategy.
  1. Expense vs. depreciation – Section 179 of the federal tax code (IRC) allows for certain types of assets to be expensed in full in the year of their acquisition, rather than depreciated over time. For 2017, that amount is $500,000. It is vital to work with a qualified accountant to make sure you’re maximizing your potential deduction.
  1. Withholding and quarterly filings – In some cases, it may be recommended or required that you file taxes and pay withholding on a quarterly basis. This can prevent any surprises on April 15 and can provide a more predictable approach to tax liability.

Regardless of business size or focus, tax strategy and filing is one of the most important responsibilities of a business owner. For further assistance, contact Chris Kennelly at [email protected] or any one of our dedicated tax law experts at 701-478-4900.

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