Starting a New Business in AZ? Don’t Forget about Tax Planning!

If you have decided to start a new business, congratulations! The process of becoming a business owner in any type of business can be immensely rewarding. In addition to making all kinds of decisions about things like your logo, marketing campaign, staffing and office location, it is important to consider tax implications from the start, and to create a strategy to best work within the framework of tax laws for businesses.

Here are some tips and things to consider from a tax planning and strategy standpoint:

1. Choice of corporate entity matters.

Don't just choose an S-Corporation or an LLC because a non-CPA friend told you to do so; the decision of which entity to use for your business can have big tax consequences over time. There is not one "right" entity for all businesses; the decision will depend on a number of factors. Talk to a an experienced, business CPA who can offer you tax and business advice to help you explore the ins and outs of various business entities so you can make an informed decision.

2. Choose your fiscal year-end.

While many businesses have December 31 as their fiscal year-end, you can choose to end your fiscal year in another month, to help control your tax filing due dates. This can be helpful if you are depending on cyclical cash flow to pay your tax obligations when due.

3. Work with a tax professional.

Tax planning and strategy are best handled by a business tax specialist who can help you explore the implications of various decisions up front. For example, the choice of hiring full-time or part-time employees will result in different tax treatment. Similarly, the decision to purchase or lease office space, and to purchase or lease equipment will all effect your business taxes. Jumping the gun by making a decision without thinking through all of the consequences could end up costing you more.

To learn more about how Sean Core CPA PLLC can help your small business with tax planning and strategy, accounting, business bookkeeping and tax services, contact us in Mesa today!