Insight on Business

November 2015

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w w w . i n s i g h t o n b u s i n e s s . c o m N o v e m b e r 2 0 15 • I NSIGH T | 31 B y A n d r e w S c h a i c k W e're coming up on the time of year that poses headaches for many small businesses: tax time. Between the organization, documentation and planning, preparing taxes oen feels like another job. For small business owners, tax planning can add even more to their plates. As another year comes close to an end, financial planners remind small businesses to make sure they plan for taxes early in the year and to stay in touch with their planners. Of course, tax deadlines for businesses are different than individual income tax deadlines. "Deadlines depend on how the businesses are taxed," says Kurt Heling with Alberts and Heling CPA's LLC. "If they are structured as an S-Corporation for example, their due date is March 15, basically 2.5 months aer the year-end." Challenges Many challenges can arise when it comes to tax planning, but the uncertainty of government regulations adds another dimension, Heling says. If a small business owner needs to file for an extension and misses the deadline, it can set tax planning back. Section 179 of the United States Internal Revenue Code was extended last year at the last minute. is allows a taxpayer to deduct the cost of certain Tax turmoil Small businesses encouraged to plan early to prepare 2015 documents for the IRS types of property on their income taxes as an expense. "One of the big ones with respect to these tax extenders is Section 179 depreciation, which is basically being able to write off equipment up to $500,000 in the year you buy it," Heling says. "If they (Congress) don't extend it, it goes back to $25,000, which is a pretty big deal, and last year it went right down to the wire before it finally passed." Terri Lillesand, tax shareholder with Schenck S.C., says when these laws are not resolved, it has an effect on the small business owner when it comes to planning taxes, but it also has an effect on the IRS. "It's hard to do tax planning when you don't know what the tax law is going to be," Lillesand says, "which in turn, puts the IRS a few weeks behind since they have to update numerous forms." Heling also says there have been years where it got passed retroactively in January versus December, which raises the question, "How do you plan for this?" "So far, they have always extended it but you never know exactly what that threshold is going to be," Heling says. "You never know if it's going to be the same as it was the year before, so that kicks in some of the uncertainty." Lillesand says not knowing about certain extenders that are expired adds uncertainty to how taxes should be planned for small businesses. Terri Lillesand I N S I G H T O N T A X P L A N N I N G

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