There are many tax advantages to owning your own business. As with most things here at Picchi & Martel, our business tax services begins with a conversation. We will often consult with aspiring entrepreneurs before they start their business to help them decide on their choice of entity:
- Sole Proprietor
- Single-member, Partnership, or Multi-member LLC
There are advantages and disadvantages to each entity that will affect their business’s bottom line (such as health insurance); it’s our job to help them decide on what entity classification works best for their business type. We also assist with setting up nonprofits.
We also advise new business startups on setting up their books properly. A well-structured bookkeeping system ensures that the financial foundation is laid correctly and provides the most tax benefit possible. Good communication between bookkeeper and the CPA is essential – it makes midterm adjustments as well as year-end tax preparation whole lot smoother. Our office will make recommendations on:
Charting the course. In addition to the setup and maintenance of business books, we like to meet periodically with our business clients – preferably in the third quarter of the year – to make adjustments that will benefit them the most next April. By the third quarter, we will know:
- journal entries for tax-benefit purposes
- depreciation schedules
- posting loan interest
- conversions from accrual to cash basis
Our staff will help manage the books too! We can provide help with bank reconciliation and categorizing accounts properly – in other words, which bucket does it go in for tax purposes and reporting purposes. Bookkeeping services are available through Picchi & Martel but not required – we are happy to work with a company’s in-house financial manager, bookkeeper or adjunct bookkeeping service.
- the implication the new tax laws will have on the business
- the anticipated business profit and how to offset it
- determine depreciation schedules for assets purchased during the year
The third quarter is also discussion for determining whether our business client qualifies for the maximum 20% business deduction and creating a strategy by adjusting their Schedule C reporting to make that happen.