There’s been a lot of discussion in the news about the impact of the new tax reform law on businesses, in particular — small businesses. Being that the majority of MSPs are small businesses, the legislation’s implications are of the utmost interest to many of us at the moment. The tax overhaul will impact every business — big or small. But if you learn anything at all from this blog post, it should be the following: MSPs should understand tax implications all time — not just when there’s a major change to the law.
1. Don’t just rely on your accountant
You’re the business owner. You need to know your business inside and out. While you can depend on your accountant to explain the laws, it’s your job to make informed decisions based on the information you have available to you. Managing taxes is a critical aspect of your role — like it or not. Understanding tax implications all the time is super important. You can’t just always rely on someone else — like your accountant.
Believe it or not, many MSPs don’t understand how the tax code can impact them. For example, maybe you showed a profit last year, and as a result of this accomplishment, Uncle Sam sent you a tax bill you weren’t prepared for (you didn’t save enough money in the bank to pay your favorite uncle off). Consider this: Cash flow and profit aren’t always the same thing. There are a whole bunch of reasons why the two don’t match up.
I’d begin preparing for taxes in late summer if I were you. If you always make the same amount, it’s not a big deal, but if you’re a growing company, you need to pay attention. Talk with your accountant ahead of time to be sure you understand how changes impact you and what strategies need to be implemented to minimize your tax burden.
2. Become informed
Do you understand business taxes? What does income tax mean to you? How about self employment tax? Taking the time to sit down to go through your tax obligations will help you with discovering expenses or depreciated items. Your goal should be to figure out as much as you can on your own before heading to your own accountant for assistance on taxes. Every tax situation is different, and you know (or should know) your numbers.
Becoming informed allows you as a business owner to plan accordingly. Knowing how your revenue will be taxed will give you a clear idea of your year-end tax obligations.
3. Consider taxes in your business plan
There’s a lot to pack into your business plan, but that doesn’t mean you should exclude taxes. We at TruMethods can help you propel your business forward with our business planning solutions. This includes assistance with your company’s overall tax obligations. We’re here to point you in the right direction when it comes to paying Uncle Sam and understanding how your business decisions will impact the taxes you pay down the line. Remember, its not what you make, its what you keep that matters.
Are you interested in learning more about planning for the future, both in your business and personal life? Click the offer below to learn more.