As the end of the year draws closer, many small business owners are beginning to wonder about changes to the tax code in 2016, and how they will affect their bottom line. In fact, according to the NFIB Research Foundation’s Small Business Optimism survey, taxes top the list of concerns for small business owners.
Small business owners deal with a myriad of financial issues, and keeping up with updates to state and federal tax regulation can be a daunting prospect. While tax codes are ever-changing, there are a few key details that every businessperson should take note of as they prepare for 2016.
The Affordable Care Act
Questions regarding the Affordable Care Act (ACA) and what impact it will have on tax bills for small businesses abound. There are several tax issues that will have a significant effect on businesses during the 2016 tax year.
In June of 2015, the U.S. Supreme Court ruled that every state must recognize same-sex marriages. This change affects businesses who employ workers in states that previously did not recognize same-sex marriages. This means that small businesses must revise state income tax withholding for affected employees. This could also require employee benefit changes.
Preparing for Tax Time
Filing taxes for small businesses is a much more complicated process than filing a personal return. The good news is, by employing the right tax strategy, small businesses can find a host of tax deductions and keep their tax bill low. It’s never too early to start planning for the upcoming tax year. It’s advisable to plan ahead by reviewing business records early and ensuring that invoicing is up to date. Small business owners should keep in mind that along with federal tax forms, state and local tax paperwork may be required.
In some cases, purchasing equipment, upgrading property with energy-efficient options, and reviewing staff compensation levels can help with establishing an effective strategy. Meeting with an accountant before the beginning of tax season can help small business owners put together a plan that will save time, money and hassle.
Preparing for tax time is not easy, and it can be especially stressful for small business owners. Keeping on top of the latest changes to the federal and state tax codes is an ongoing process that requires experience and dedication. Relying on the support of a seasoned financial professional can help.
Schedule an appointment with the team at Lauzen Accounting today and learn more about getting your small business ready for the 2016 tax season.