Today’s CFOs have a lot on their plates. Ensuring that your company remains financially healthy and compliant with tax regulations is a complex and time-consuming process — and that’s just a small part of the role.
So how do you keep up, while minimizing your company’s tax burden?
- Brush up on current laws. One thing is for certain each and every tax year — change. To avoid penalties and minimize liabilities, stay informed on tax law updates and regulations that may impact your business, maintain a broad understanding of the tax code and know how to apply applicable provisions.
- Take advantage of available tax credits and deductions. Identify and claim any appropriate tax credits to help offset your tax liability and reduce your overall tax liabilities. From the R&D tax credit to the work opportunity tax credit, look for avenues to save. Be the expert on tax deductions, including those for business-related expenses and depreciation. And make sure your business is structured in a way to minimize its tax burden. For example, does it make more sense to run as an S corp, C corp or an LLC?
- Review current practices. Are your bookkeeping and accounting practices an accurate reflection of your company’s finances? Are you keeping detailed records of income, expenses, investments, while reconciling your accounts regularly? Even small errors can have a huge impact when it’s time to file your company’s tax returns.
- Implement added measures. Consider adding new processes that offer increased visibility into your company’s’ financial performance. From enhanced budgeting and forecasting to strategic cash management practices, these tax optimization strategies can help limit your liability and allow for smarter tax planning.
- Simplify payroll tax reporting. You don’t have to do it all. To save time and remain compliant, you may utilize a reliable payroll system to handle tax filings, payroll calculations and deductions on your behalf.
- Leverage technology. CFO are increasingly being asked to step up in tech and automation, and for good reason. Thanks to automation, you can free up time and resources from often mundane tax-related tasks. Many accounting software solutions offer features specifically designed for tax reporting to help optimize the tax preparation process.
- Foster a cohesive team. Communication should extend beyond the C-suite. Tax considerations and challenges can be handled more proactively when your finance team, tax advisors and other stakeholders work together and maintain open lines of communication and collaboration. And when every employee understands how their role plays into the bigger picture, they’ll be more committed to helping the company be successful.
Make the most of your CPA relationship
Magone & Co can help organizations like yours operate more efficiently — navigating complicated tax laws, identifying potential deductions and ensuring ongoing compliance. Get in touch to see how we can help.