Although it’s too late to make a big impact on your business’s 2002 taxes, the sooner you start planning for 2003 taxes, the better, according to Joe Saloom, tax partner with Crowe Chizek’s Columbus office.
“It’s never too early to start planning and preparing your business for the tax season,” says Saloom. “You will be much less likely to make mistakes if you aren’t rushing to gather information at the last minute.”
The first step in a smooth tax preparation process is to meet as early as possible with your tax preparer, says Larry Waller, president of Columbus-based Waller Financial Planning Group.
“Meeting with your preparer early helps to ensure that you are collecting the right information in the right way,” says Waller.
The meeting can help you take advantage of tax law changes that can benefit your bottom line and adequately prepare the documentation necessary for those changes.
“Depending on the size of the business, you may want to schedule meetings at definite intervals as well,” Waller says.
Saloom says companies may not be aware of a change to federal business tax laws in how you can deduct depreciation expenses on new equipment. Previously, there were limitations to when you could take the deduction, according to when the equipment was placed in service, and to how much you could take at once.
Now, no matter when in the tax year the equipment was placed in service, you can deduct up to 70 percent of the depreciation.
“You basically get the deduction earlier and pay less tax,” says Saloom.
Waller advises companies to also look for tax deductions in their employee benefits.
“Some health insurance benefits like a reimbursement account are deductible to corporations and not counted as income to the employee,” says Waller. “Both the company and employees benefit.”
Retirement benefits like 401(k)s, profit-sharing and IRA plans can also affect your taxes. Each has different tax consequences, which is why you should meet with your preparer and starting the process now.
“Achieving your best tax picture takes a lot of careful planning before the end of the year,” Waller says. “Meeting with a skilled preparer helps you to make wise decisions.” How to reach: Crowe Chizek, (614) 469-0001 or www.crowechizek.com; Waller Financial Planning Group, (614) 457-7026 or www.waller.com
