How Your Business Can Benefit from Tax Planning in Ormond Beach

Author : Camputaro & Associates
May 01, 2022

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Business owners in Ormond Beach have a unique tax situation that is much more difficult to handle than individual tax returns. Even very small businesses and solopreneurs have to worry about things like self-employment taxes, whether or not they actually qualify for that home office deduction, and other important factors that will impact your tax liability when you file your next return. But proper business tax planning in Ormond Beach can actually make a big impact on your taxes, and provide your business with many benefits. Keep reading to learn how tax planning and tax projections benefit your company.

Reducing What You Owe

While we can’t ever guarantee to lower your tax liability, we can tell you that the best way to reduce your overall tax debt is to plan ahead. Many people take a passive approach to their business taxes: They earn income throughout the year, make their business purchases, and then simply see what happens when they file during tax season. But if you’re not proactively planning for your taxes throughout the year, you’re missing out on a lot of opportunities to improve your tax situation.

As you likely know, when the calendar year ends, most of your opportunities to reduce your tax liability end as well. What if purchasing that new office printer you were eyeing could have brought you down into a lower tax bracket? You could have gotten the equipment your business needed while also saving money on taxes. But if you don’t examine your tax situation throughout the tax year, you won’t know these things.

There are many ways that planning ahead can reduce your overall tax liability. One example is a method known as “bunching” your business deductions. This involves doubling up on your deductible expenses one year, so that you can have a high amount in itemized returns. Then, the next year, your expenses are lower and you can take the standard deduction. For example, if you purchase all of your business’s supplies at the beginning of each year, your deductible expenses will likely be about the same every year. However if you purchase next year’s supplies at the end of this year, you will have double the deductible expenses in 2022 and can itemize for a higher deduction, then take the standard next year.

Over time, bunching deductions for your business could save you thousands in taxes. However, it takes planning and foresight, which is why we recommend that you work with a CPA to ensure that you’re using this tax strategy effectively.

Preparing You for Your Tax Bill

Though tax planning will almost always help you to reduce your tax bill, you can still sometimes end up with a bit of sticker shock when you file your tax return. This might be due to an increase in your income for the year, or even a tax law change that had a heavy impact on your business’s tax return. Whatever the cause, if you’re not utilizing tax planning and projections, you could be in for a nasty surprise when you file in the spring. Worse yet, that surprise comes with a payment deadline, and if you don’t have enough funds to pay the tax bill (because you were expecting it to be much lower), you could be in a very tight spot.

Tax projections are a key part of professional tax planning. We look over your financials before the tax year is even over, making projections based on your current income and expenses, and give you a better idea of what to expect when you file your tax return. Even if the number is higher than you’d expected, this can give you several more months to plan and prepare for that tax bill. We can also help you to better understand exactly why your tax bill is higher than you expected, and offer recommendations for reducing your tax liability before the year ends.

Making Last-Minute Tax Moves

Speaking of recommendations based on tax projections, tax planning gives you the information you need and the time required to make last-minute tax moves to improve your tax situation. As we already mentioned, if you’re not examining your tax situation until tax season begins, you’ve already missed out on most opportunities to impact your final tax liability. But by planning ahead and examining those numbers before the year ends, you can make important financial decisions like buying that equipment you’ve been considering, contributing to charitable causes, or increasing your employees’ holiday bonuses.

Business tax planning in Ormond Beach gives you more control over your taxes. If you’re ready to take a more proactive approach to your business tax return, contact Camputaro & Associates today.

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Camputaro and Associates
Certified Public Accounting Firm
136 N. Orchard Street, Suite 8
Ormond Beach, FL 32174
(386) 255-2511