Frank L. Zerjav CPA leads Advisory Group Associates in St. Louis. Frank L. Zerjav, CPA, a licensed Professional Tax Advisor uses pro active Srategic Tax Planning for business and real estate owners, professionals, investors and individuals to help them minimize any potential tax burden and to allow them to keep more of what they earn.
The following checklist is designed to help professionals & business owners stay up-to-date on all tax related issues, and away from the scrutiny of the IRS:
Keep and retain good records about who is an “employee” and who is an “independent contractor.” Contractors must furnish their invoice for payments made.
Hire a Professional Tax Advisor who has experience and expertise in your type of business, whether it’s a real estate investor, construction industry or professional practice.
Keep and retain good records on how much you paid for, and the date you placed in service, all business equipment, business vehicles, etc.
Don’t even consider using funds you have withheld for employee payroll taxes (or any taxes, for that matter) as a short-term loan to tide you over during a shortfall in working capital.
One of the biggest traps for professionals and business owners is estimated taxes-paying them on time, calculating them correctly, and knowing the safe harbors that can protect them against underpayments. Miscalculating any of these steps can be a major headache.
If your spouse, child, mother-in-law, or other close relative works in your business, make sure he or she abides by the same employment rules as your unrelated employees.
You or your accountant should retain all relevant tax records for at least seven years, and if your records relate to property and depreciation, keep them until the property is disposed of, plus an additional three years.
Keep detailed records on how you use your personal or business-owned vehicle for business vs. personal purposes.
Make sure that you and your Professional Tax Advisor is familiar with the tax rules, including the favorable tax credits and deductions that are unique to your business or professional practice.
If it becomes necessary for your business to open a foreign bank account in order to pay vendors or others in another county, make sure you and your professional tax accountant are vigilant in following the new rules on foreign bank accounts, known by the acronym FATCA (short for the Foreign Account Tax Compliance Act).
Become familiar with the tax rules surrounding starting, running, selling and shutting down a business. Determine whether you should operate as a Partnership, a Corporation, an LLC, or a Sole Proprietorship.
Professionals and business owners need to be focusing on tax planning all year long to avoid missed opportunities and to capitalize on scores of perfectly legal opportunities to lower their taxes. Never make important financial decisions without at least considering the tax consequences. Savvy owners factor taxes into their planning throughout the year and stay on top of continual tax law changes.