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Small business tax implications to consider in 2024

On Behalf of | Apr 8, 2024 | Tax |

The current tax year brings some significant changes for small businesses in Texas. Although individuals must file income taxes or request an extension by April 15, small businesses have varying deadlines based on their industry. Here are some considerations if you haven’t reached your tax deadline or have filed an extension.

Taxes don’t have to be scary

Many entrepreneurs start their small businesses by filing their income taxes themselves with the help of software. However, as your business grows, you may have more tax law implications, some of which you may miss. A better course of action is to have a tax professional review your information to ensure you comply with all changes and get the tax breaks you deserve. Because of pending tax legislation in Congress, you may want to file for an extension. You’ll still have to pay quarterly taxes, but the additional time will give your tax professional the ability to prepare for any changes that occur.

Other issues you should pay particular attention to include:

• Optimizing your retirement plan

• Writing off research and development costs

• Avoiding underpayment penalties

The last point is particularly important because underpaying will cost more starting with this tax year. You may also want to check whether you have previously filed an Employee Retention Credit (ERC) for which you may not have qualified. Many companies have found they must pay back breaks they weren’t entitled to.

Small business tax issues are complicated

Keeping updated on your small business tax issues is imperative. Payroll and other tax issues are complicated, usually beyond what most business owners can accomplish. Doing the wrong thing or neglecting your tax obligations can result in significant penalties. Different parts of the tax codes result in different penalties.

Working with seasoned tax professionals can save you a lot of money in extra tax paid and fines when you don’t file your return with the proper information. The rule of thumb is the larger your small business is, the more you need professional tax help. Don’t go without it, as doing so can make a significant difference.