NFIB’s April webinar gave small business owners a chance to ask a CPA questions surrounding their business taxes
With tax season in full swing, don’t miss essential small business tax tips from NFIB’s latest webinar. On April 6, special guest Micah Fraim joined Senior Executive Counsel for the NFIB Small Business Legal Center Elizabeth Milito and Executive Director for the NFIB Research Center Holly Wade to answer questions about taxes.
Why work with a CPA?
“It depends on the scale of your business how we’re going to benefit you,” Fraim explained. “It’s just working with an expert who understands the nuance of this little, tiny area of the world and because of that we’re usually able to optimize either reducing your taxable income or structuring your income in such a way that you’re getting a more favorable tax rate on it.”
How should small business owners prepare for tax season, and when should they start?
“The easy answer is you should be doing it year-round and doing it immediately. How necessary that becomes varies wildly based on how big the business is…Beyond just telling you ok, here’s what your tax bill’s going to be, we’re trying to plan for the business overall and looking at what’s working and what’s not and tweaking your operations based on that. You should do it all year round, but that becomes much more important as you grow.
What are the common IRS audit “red flags” for small businesses, or if you are audited how should you prepare?
“The IRS will never tell you exactly what the true audit red flags are. The biggest thing is going to be expenses that really don’t make sense. Aside from that it’s going to be big fluctuations…If you do have those, it’s going to be more important to recognize that you’re slightly more likely now to get audited. So have all of your documentation prepared. Make sure you’ve got your bank statements, credit card statements, your receipts. It’s easier to gather that stuff either in real time or a year later versus four years later. So if you do have anything that seems a little unusual, probably take a little more preparation at the time to make sure your documentation is in order.”
For small businesses that sell out of state, a CPA or specialized software program is the best tool for determining sales tax. Use NFIB’s Out-of-State Sales Tax Requirements chart to begin to navigate post-Wayfair out-of-state tax obligations.
The next webinar is on Wednesday, May 4, at 12pm and will focus on improving your business website. More information will be available soon to register for Essentials of an Effective Business Website.