Year-End Business Reporting for Growth

End-of-year can be a bit of a scramble as a business owner.

So, before we get into holiday craziness, a friendly reminder: year-end is also your prime opportunity to make the calendar work in your favor as a business.

From year-end profitability analysis to staff bonuses to marketing initiatives to capture year-end spending … do not neglect your remaining window of opportunity.

Get on our calendar sooner than later to best position your business:

There is still some budget discussion in Congress for the new fiscal year, which could include some tax provisions, as several tax changes introduced by the Tax Cuts and Jobs Act are set to end in 2025. These changes include potentially reinstating the full deduction for research expenses, bringing back the improved Child Tax Credit, and possibly removing or raising the cap on state and local tax deductions.

Please allow me to give you some checkboxes and updates on what we do know about your year-end taxes and business reporting.

Year-end  Opportunities For Businesses
“Opportunities don’t happen. You create them.” ― Chris Grosser

There are plenty of “standard” pieces of advice that any business should consider at year-end when it comes to tax planning and business reporting. There are also recent and developing tax legislation changes that affect that advice.

What I have for you in this article falls into both of those categories. I always recommend a customized approach, which I provide to my clients, but this is a basis from which to start.

Clean energy
For your business, there are 16 new or expanded tax incentives related to clean energy, and they’re some of the most significant ever offered. Nontaxable entities such as not-for-profits, tribal entities, and government entities may qualify for elective payments rather than a credit. But to maximize these tax breaks, you may need to meet certain wage and apprenticeship requirements. It’s worth exploring before year-end what these incentives could mean for your business on your 2023 return.

Employee Retention Credit
You’ve heard that the IRS has temporarily stopped processing any more claims for this credit through the end of the year while they sort out previous claims and identify the false ones. If you were planning to apply for the ERC, you’ll have to wait until they sort out their backlog. I’ll write more on this soon.

Retirement plans
The business reporting requirements for your retirement plan depend on its size and how many people are participating in it. Now, some businesses like to give year-end bonuses or contribute to their employees’ retirement accounts. This can actually come with some tax benefits, which is a nice perk.

If your business still needs to get a retirement plan for your employees, consider looking into it for 2024. Even if you’re a small company with 100 or fewer employees, you can easily set up something called a SIMPLE (Savings Incentive Match Plan for Employees) IRA. You can reach out to me for more details on that.

Tax documentation
It’s never too early to start getting organized for business reporting. You might need to fill out some additional forms, like W-2s or W-3s, quarterly state and federal returns, or IRS Form 1099-NEC. That last one comes into play if you’ve paid just $600 or more to independent contractors.

The requirement to submit the W2s and 1099s is now the MUST be filed electronically. If you use a third party payroll provider ( Paychex, ADP, Intuit) they will do that for you.

Also, start gathering all the paperwork for your deductions. It’s a good idea to do this sooner rather than later because we want to make sure you get back as much money as possible. So, get your documents together, and we’ll help you navigate through the tax season smoothly.

Debt, invoices, and expenses
It’s a good idea to follow up with your debtors and try to collect any outstanding payments by the end of the year. Having cash on hand makes managing your books much smoother.

Now, there are times when it might make sense to delay recording some income until the new year, especially if it could affect your taxes. The same goes for deductible expenses. For instance, if you’re planning a significant business deduction, like buying new equipment, it could have a big impact on your taxes one year and an even bigger impact the next.

If you’re unsure about the timing of these financial moves, don’t hesitate to reach out to me. We can help you make the right decisions for your taxes based on strategic business reporting.