June 27, 2017
While you are probably glad to have your business taxes filed for this year, it can be extremely beneficial to fine-tune your business finances and tax situation through a mid-year planning process. Doing so will illuminate areas where you may need to make changes to strengthen your 2017 business results.
Here are a few key areas to consider analyzing now that mid-year is here:
With the rush of preparing for tax season, on top of the regular hectic pace of running your business, it can be tough to keep your financial records up-to-date. If you fell behind over the past several months, now is the time to get caught up, before the lag in your record keeping hinders your business.
Start by reconciling your business accounts, making sure that your balances are accurate, and that you are current on your bank deposits and bill payments. By investing some time to make sure your day-to-day accounting is on track, you will have the data you need to evaluate important metrics, including your profit and loss statements, annual financial comparisons and cash flow.
Adjust estimated tax payments
If you had a large tax liability or a large refund this year, you may want to revisit your estimated tax payments and adjust your calculations to avoid owing too much at the end of the year, or leaving your business cash-poor due to overpayment of taxes. As the year progresses, monitor your bottom line and adjust your tax estimates accordingly.
Evaluate your entity structure
As you are likely aware, the way that you structure your business can have important tax and legal implications. Depending on the type of business entity you have now, you may wish to select a different one, depending on your goals and tax situation. Discussing this with a trusted financial advisor is an important step when evaluating your business entity.