Tax Planning for Small Business Owners & Self-Employed Professionals
Proactive tax planning to help you understand your tax obligations, prepare for what’s ahead, and make informed financial decisions throughout the year.
Tax Planning Should Happen Before Tax Season
Tax preparation looks at what already happened. Tax planning looks ahead.
Throughout the year, changes in income, expenses, business activity, and other financial decisions can affect your tax situation. Waiting until it’s time to file your return may leave fewer opportunities to prepare for the tax impact of those decisions.
Evolve Bookkeeping & Tax takes a proactive approach by helping you understand potential tax obligations before filing season arrives, identify tax considerations relevant to your situation, and stay better prepared for estimated and year-end tax payments.
Tax Planning Services for Small Business Owners
Tax planning is based on your individual circumstances, but depending on your situation, planning may include:
- Review year-to-date business income and expenses
- Estimate federal and state tax obligations
- Review quarterly estimated tax payments
- Identify potential estimated-tax shortfalls
- Discuss the timing of business income and deductible expenses
- Evaluate significant business purchases and other financial decisions
- Review prior-year tax information when relevant
- Coordinate bookkeeping, tax planning, and tax preparation
Tax planning recommendations depend on your specific facts and circumstances. The goal is to give you better information before decisions are made—not simply calculate the result after the year is over.
Who Can Benefit From Tax Planning?
Tax planning can be especially valuable when your income or business circumstances change during the year. It may be a good fit if you:
- Are self-employed or own a small business
- Have income that varies throughout the year
- Make quarterly estimated tax payments
- Expect a significant increase or decrease in business income
- Are considering a major business purchase or investment
- Want to avoid unexpected tax bills at filing time
You don’t need to wait until the end of the year to start planning. Reviewing your tax situation during the year can give you more time to understand your options and prepare for upcoming tax obligations.
Better Books Make Better Tax Planning Possible
Effective tax planning depends on having accurate, current financial information. If your books are several months behind or your income and expenses aren’t being tracked correctly, it’s much harder to understand where your tax situation may be heading.
When bookkeeping and tax planning work together, your year-to-date financial information can help identify changes in income, evaluate estimated tax needs, and provide a clearer picture for year-end planning.
For clients who use Evolve for both bookkeeping and tax services, the goal is a more connected process from your day-to-day financial records through tax planning and preparation.
What to Expect When You Work With Evolve
- Start With a Conversation – We’ll discuss your business, current tax situation, and any changes or decisions you’re anticipating.
- Review Your Financial Information – I’ll review the relevant income, expenses, bookkeeping information, prior tax information, and estimated payments needed to understand your current position.
- Evaluate Your Tax Situation – We’ll look at your projected income and potential tax obligations and identify planning considerations based on your circumstances.
- Discuss Planning Options – I’ll explain applicable considerations and how certain business or financial decisions may affect your tax situation.
- Follow Up During the Year – When appropriate, we can revisit your tax situation as your income, business, or circumstances change.
Tax Planning FAQs
When should I start tax planning?
Tax planning can be useful throughout the year, particularly when your income or business circumstances change. Starting before year-end generally provides more time to understand your tax situation and prepare for upcoming tax obligations.
Is tax planning different from tax preparation?
Yes. Tax preparation focuses primarily on accurately preparing and filing a return based on activity that has already occurred. Tax planning looks ahead and considers how your current financial situation and upcoming decisions may affect your taxes.
Can you help me with quarterly estimated taxes?
Yes. Tax planning can include reviewing your year-to-date income, prior payments, and projected tax obligations to help determine appropriate estimated tax payments.
Do I need to be a bookkeeping client to use tax planning services?
No. You don’t have to use Evolve for bookkeeping to receive tax planning services. However, accurate and current financial information is important for effective tax planning.
Can you guarantee that tax planning will lower my taxes?
No. Tax results depend on your individual facts and circumstances, and tax planning cannot guarantee a particular outcome. The goal is to help you better understand your tax situation, identify applicable planning considerations, and make informed decisions.
Can we revisit my tax plan if my income changes?
Yes. Significant changes in income, expenses, business activity, or other circumstances may affect your tax situation. When appropriate, your projections and planning considerations can be revisited during the year.
How often should I meet with you for tax planning?
It depends on your situation. Some clients may benefit from a midyear or year-end review, while business owners with changing income or significant financial decisions may benefit from more frequent planning. We’ll determine an appropriate schedule based on your circumstances.
Ready to Plan Ahead for Your Taxes?
Let’s talk about your tax situation and how proactive planning can help you better understand what to expect and prepare for the year ahead.