Although it may be hard to believe, the 2025 Tax Season is already upon us! With it comes the responsibility of preparing your 2024 documents to ensure that your business and all of its employees have everything which is necessary to fulfill tax reporting obligations.
The filing deadline for sole proprietors is April 15, 2025. The deadline for S-corporations and Partnerships varies, depending on their fiscal year. It always falls on the 15th day of the third month following the end of the company’s fiscal year. If the 15th falls on a weekend, check with the IRS for the new filing date as it varies. Finally, for a C-Corporation, their filing deadline is on the 15th day of the fourth month following the end of the fiscal year.
One strategy that many businesses use to reduce their overall taxable income is to defer income from the prior year by invoicing clients in January instead of December and/or delaying year-end bonuses. Another savings strategy to discuss with your CPA is prepaying deductible business expenses.
Once you have all your documents assembled, consider whether you should take the standard deduction or itemize deductions; depending on your situation, the way you approach deductions can make a big difference!
Does your business make donations to non-profit organizations throughout the year, either from the business itself or by matching gifts made by your employees to their favorite charities? Contributions to qualified not-for-profit organizations may be tax-deductible if you itemize them. Be sure to keep receipts for all donations made to make reporting them easier.
The new year is also a good time for business owners to assess the health insurance plans for their companies. Renegotiating health insurance options during Q4 of the previous year to secure better plans for the new year could present another opportunity for savings during tax season. Try to find plans with better coverage-to-cost ratios. As all business owners know, health insurance coverage is a major investment. Insurers often adjust premiums and coverage options in the new year, so it can be a great time to work directly with providers or insurance brokers to negotiate better terms for yourself and your employees.
Helpful Tips
Here are a few preparation tips for the tax season:
Verify all of your employees’ information to ensure it is accurately listed on their W-2s. We recommend sending out a company-wide communication to enable every employee to personally verify their information as it currently appears in your payroll system.
If there is an option available for your employees to set up their own account in the company’s payroll system, you should encourage them to do so; this will enable them to have direct access to their W-2 whenever it’s required.
Prepare the company’s financial statements , primarily the Profit & Loss and Balance Sheet. Accurate statements, prepared in advance, will make the filing process much smoother and less stressful.
Ask your accountant to prepare the financial statements, and take time to review them carefully with him or her. Identify potential deductions or offsets.
If there are expenses in question, request that the accountant review the transactions listed in that specific expense.
If you’ve realized Capital Gains from selling investments, review your portfolio for unrealized losses. Take a closer look at any underperforming assets you may have sold before the year ended, as this could help reduce taxable income while keeping your overall portfolio balanced.
- Stay informed about proposed tax law changes that could affect your return.
- Keep track of any tax documents you receive. Compare the information reported on the tax documentation to the information your accountant is reporting on your financials. If they are not the same for any reason, investigate further to identify which source is reporting the accurate information. Then make sure to correct the inaccurate information before submitting your documents.
While filing your payroll taxes is not a requirement to file your corporate return, the information reported on your W-2 should always match the information on your employment tax reports. Mismatched information can trigger queries and possibly an audit, which is the last thing any business wants. However, if you do receive a letter from the IRS, don’t panic—there are qualified Enrolled Agents readily available, experts in tax resolution, who can represent you and your business with the IRS.
There are many reasons why the IRS sends letters, and it’s not always due to an impending audit. Quite often, they just want to clarify information to address perceived (or real) discrepancies, or possibly to collect unpaid taxes. Whether it’s missing documentation or something more complex, experts in tax resolution services can be invaluable to help address the situation in an expedient way. A professional who is authorized by the IRS to act on your behalf, such as an enrolled agent, (who may just happen to be the person who prepares your taxes—always ask!) can provide you with the right guidance and take the necessary steps to promptly resolve these issues.
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