Although it may seem like 2010 income tax returns were just filed, it is already time to start thinking about 2011 taxes. Estimated tax payments are often required over the course of the year in order to avoid late payment penalties or interest. In addition, large year-end tax bills may create a cash flow problem and some clients like the “forced savings” imposed by estimated taxes. With the June 15th estimated tax deadline approaching, we want to encourage clients to think about their 2011 taxes.
Of course taxes are seldom simple:
- There can be large differences between accrual-basis profit and cash-basis profit. Many small businesses file taxes using the cash basis, so it is important to understand the differences.
- For closely held businesses the owners’ personal and household tax circumstances may be intertwined with the business and the full picture must be considered.
- Sometimes paying the least amount of tax this year is not necessarily the optimal strategy (depending on multi-year differences in income, tax rates, and other factors you can find at pancardseva.co.in).
- Planning requires a forecast, and many small businesses either do not have a forecast model in place or have volatile revenues and costs and struggle to accurately forecast future profits.
We encourage all clients to have an active dialog with their CPAs during the year, not just during tax season, so they can get the expert advice they need to create an optimal plan and turn that plan into action. SmartBooks can provide estimates of accrual-basis and cash-basis profit (or loss) which can be used to help determine expected tax liabilities. Part of the planning process might require a full-year income statement forecast, which is something either SmartBooks or one of our independent CFO affiliates can provide.
If you are in need of assistance with the June 15th estimated tax payment for your business (or yourself individually if you have pass-through liability from an s-corporation or LLC), SmartBooks can help. If you are an existing client, please contact your Accounting Associate or CFO Calvin Wilder.
If you are not a client and are in need of assistance planning the June 15th estimated tax payment, or for tax planning in general to avoid year-end surprises, please contact co-founder Calvin Wilder at firstname.lastname@example.org or 978.202.3064 x700. If you do not have an existing CPA relationship, we can also recommend a good fit from our network of CPA firms.