By Angela T. Herzog
Congratulations, business owner — you’ve successfully made it through tax season! Now is the perfect time to regroup, strategize and plan for next year by staying organized and up to date on tax law changes.
Spring or summer can be the perfect time to meet with your CPA or tax preparer to plan for your 2026 tax filing. Post– tax season planning is an opportunity to strengthen your financial future and make next year even better.
HERE ARE SOME KEY STEPS EVERY NEW BUSINESS OWNER SHOULD TAKE ONCE A NEW TAX YEAR BEGINS:
1. Review your tax return and set up file folders by category of expenses and decide if Excel or a software system would be a better solution for the year ahead. Using your business checking account and one business credit card simplifies recording transactions and making sure they are complete for tax preparation.
2. Update your record-keeping system by performing a monthly bank reconciliation. This process, whether automated or manual, helps to ensure you have captured all banking transactions.
You also may want to move your physical file folders to digital to not have paper to sort through at preparation time. However, it is imperative to have computer backups stored off-site. It also is best to set aside a particular day of each month to update your records, so it does not become an enormous task at year end. By doing this, you will have a better handle on your business profits or losses — allowing you to plan accordingly for management and income tax purposes.
3. You must pay quarterly estimated taxes. Your CPA or tax preparer should give you the four estimates when the tax preparation is complete for the prior year. If there are significant changes in your income from year to year, you need to be available to meet with your CPA or tax preparer to adjust your estimates accordingly.
It is best to set up a tax savings account or a category within your savings account that is dedicated to taxes. It is best to set up automatic deposits to the savings account each month so you do not forget. If you are self-employed, the estimated taxes also include your payment to the Social Security Administration for your portion, as well as the employer-matching portion. If you do not pay quarterly estimates or pay them late, the Internal Revenue Service charges penalties than can substantially reduce your profits.
4. Discuss your entity type with your CPA or tax preparer to ensure you are in the most tax-advantageous entity for your business. It also is a great time to ask your CPA or tax preparer if they see any deductions you’ve missed.
Another good idea is setting up a retirement plan so you can save for the future while reducing your tax liability.
5. Be sure to address all types of taxes with your CPA or tax preparer to determine whether they apply to you. Tax types include federal taxes, state taxes, local taxes, payroll taxes and industry-specific compliance.
6. Find the right team. New business owners try to do everything themselves at first, but as your business grows, the right team becomes essential. A team of professional advisors should at a minimum include a CPA or tax preparer, who also can offer bookkeeping services, an attorney and an investment advisor.
Entrepreneurship is part of the American Dream, but success takes years of planning, motivation and hard work. With the right team of advisors, the sky is the limit.
Angela T. Herzog is a CPA with GranthamPoole PLLC CPAs’ Hattiesburg and Madison offices. Reach her at aherzog@granthampoole.com or (601) 271-8860.