Here it is, the beginning of the fourth quarter. This is the time when many entrepreneurs start examining the books more closely to determine where the business will land at year-end. They assess expenses, balancing them against revenues and hoping the latter outweighs the former.
Of course, some seasoned business owners know what it takes to run a profitable company. They’ve likely kept tabs on all this during the year. They’ve learned that constant assessment of their financial situation leads to fewer surprises at the end of the year — and also at tax time.
As crazy as it sounds, tax time is just around the corner. Why not start now to get things in order so that when it’s time to prepare your taxes next spring, there’s less stress involved?
Here are a few pointers to get you started from the experts at Adams Accounting Solutions.
Approaching Deadlines
Filing extension deadline: October 16, 2023, is rapidly approaching. This is the deadline for tax filings for individuals who filed an extension back in April. Keep in mind that the tax extension only gave you extra time to file your return; it did not extend the time you have to pay what you owe. If you didn’t pay anything in April when you filed your extension, you’ll have to pay now and include interest and filing penalties, too.
2022 401(k) contribution deadline: October 16 is also the deadline for contributing to 2022 self-employment retirement plans, including SEP and Simple IRAs. If you filed on time for an extension, you have until October 16 to make your final contributions to these plans for 2022.
Remember that retirement accounts are an investment in your future. Contribute as much as you can each year to maximize this financial tool.
Estimated Tax Payments
Estimated tax payments are those made by self-employed individuals or entities that earn income that’s not subject to federal withholding. This doesn’t mean the income isn’t taxable; it just means that taxes aren’t withheld from a paycheck as they would be if you worked for someone else. Freelancers, contractors, and other self-employed individuals are subject to quarterly estimated tax payments, as are certain types of businesses.
Quarterly estimated tax payments for the 4th quarter aren’t due to the IRS until January 16, 2024. But tax experts recommend paying them in the quarter in which the income is earned. By submitting the Q4 payment before December 31, you’re simplifying the bookkeeping process. In this way, there’s no debate over which year the payment applies to.
Adams Accounting Has Answers to All Your Tax Questions
At Adams Accounting, we know you have your hands full trying to run your business. We’re here to make your life easier. We specialize in tax planning and preparation for small businesses. We also offer business consulting services.
Give us a call if you have tax-related questions throughout the year. We’ll help keep you on track so that next year’s tax season is a breeze!
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.