Yikes! The Tax Cuts and Jobs Act!!! We have been working hard interpreting and applying the new (and old) tax law. All year we have been attending seminars, giving workshops, meeting with clients, dealing with the IRS and DRS and now it’s our last chance before we start the new year to get the word out and suggest strategies.

SHOULD YOU WAIT UNTIL JANUARY TO HAVE YOUR 2018 TAX STRATEGIES IN PLACE?

It’s not the best move…. A day late and a dollar short, as they say!

1. As a small business owner, you have options for retirement. The nuances of the plans and amounts to be contributed should be addressed with us. Some have to be made before year end, some by the filing deadline, some by the extension deadline.
2. Expenses are not a dollar for dollar savings. Don’t spend money you don’t have thinking you will be saving on taxes. Be strategic. Remember: if you use your credit card, the transaction date is the date it is considered purchased.
3. Review your 2018 transactions, reconcile, and update your books!
4. Pay yourself wages (if you are a C or S Corp) – DON’T pay yourself wages if you are treated as a partnership or a sole proprietor.
5. If you pay out holiday bonuses, make sure they go through payroll. It is a very big NO-NO to give bonuses outside of payroll and could be very costly to you!
6. If you do receive wages, you still have time to adjust your withholding. We have been advising our clients all year to do this.  Take a look at your withholding to date. Let us know if you want us to work with you on this. Best to avoid surprises on April 15^th!
7. Get organized now for the issuance of 1099’s.The IRS is getting tougher on these compliance matters.  You need to issue 1099’s to anyone you paid for services or rent to (including your landlord, attorney and accountant) for$600.00 or more. Use the W-9 form to obtain the pertinent information from the service provider – do it NOW – and not on Jan 31! Even better – going forward don’t pay anyone until you have them complete the W-9 form.  Ask us if you need help!
8. Take a look at your income for 2018 and anticipate the tax liabilities.  Make changes now wherever you can.
   1. If you are operating as an S-Corporation or Partnership, be aware of CT’s new
      Pass-Through Entity Income Tax. You are required to make estimated taxes through the business and there are penalties if you do not. If you have not made estimated tax payments for the business yet you still have time. But…it’s complex. You will most likely want to work with us on this one. Call soon!
   1. Be aware of the new 20% Qualified Business Income Deduction for Pass-Through Entities. This is a new deduction that is calculated separately. And, yes, very complex.
9. Not to be confused with the CT Pass-Through Entity tax is the CT Business Entity Tax (of $250.00 is due every other year and the next return due date is 04/15/2019.  All LLC’s, with the exception of C-Corps, are subject to the Business Entity Tax.You may receive a bill in the mail or you may receive notification by email. If your copy does not arrive you still have to file a timely return. We highly recommend filing this form electronically using the TSC-Bus. We are not going to routinely complete paper forms this years (we have found this to be too confusing for the business taxpayers), but we will remind you that they are due. We will help upon request.

In summary,there are many changes this year. Not all of the changes will impact each business taxpayer – much depends on the entity and individual situations.

As always, upon request we are here to help!