Calvin: 0:01

Welcome to the Empowering Healthy Business podcast, THE podcast for small business owners. Your host, Cal Wilder, has built and sold businesses of his own and he has helped hundreds of other small businesses. Whether it is improving sales, profitability and cash flow; building a sustainable, scalable and saleable business; reducing your stress level, achieving work life balance, or improving physical and emotional fitness, Cal and his guests are here to help you run a healthier business, and in turn, have a healthier life. Hey Greg, welcome back to the podcast.

Greg: 0:37

Thanks for having me.

Calvin: 0:38

So we had, another start non-stop with the beneficial ownership information reporting last week. What's going on with that now? What's the latest?

Greg: 0:48

So, on December 23rd, they decided to give us a not so great Christmas present and they reinstated the nationwide injunction which was originally halting the enforcement of beneficial ownership filing and they gave us a few extra days to file, but it was going to be kind of a, rush thing to get everyone to file and then a few days later on December 27th, they decided that that was not a funny joke and they decided that they would be postponing the requirement for businesses to report the, ownership information while the merits panel reviews the law. So we are back into a holding pattern where it's a voluntary filing

Calvin: 1:39

Alright, so if you haven't filed, listeners, stay ready to be determined whether you're going to need to file and how fast you're going to need to file.

Greg: 1:50

I thinkat this point, even if they reinstated it today, they would still give us a couple of weeks to file. This is not a hard filing by any means. It can just feel like the government's trying to, really get into your living room and steal all your personal information. But it is not a hard filing. So, if we need to do a rush job, but knowing our government and their infinite wisdom, they'll probably reinstate it right around the big tax filing deadline. So

Calvin: 2:17

All right, Greg. So, as we approach tax season, maybe we're in tax season from your perspective now, um, let's talk about what, what small business owners need to do to get ready for tax season.

Greg: 2:32

Yeah. So, you know, speaking of tax season, couple of things, that I, I put together some notes for things that I see every year that I think can just help, whether you're a client of ours or you do it on your own, or you have someone else prepare a return, just things that, you can do now to help facilitate the process of getting your returns filed, you know, accurately and timely and all that. So I think the 1st off is just making sure that, you know, you've got all the socials, all your security numbers in place if that's something that applies to you, you know, if you had a, new baby this year and you have to get them a social security number. These are all things that can be done now to help facilitate the process. One thing that I do run across a lot is the identity protection pins. Those are becoming more and more common. you can get one just by going onto the IRS website and signing up for one or if you've ever had a data breach or someone filed a fraudulent return on your behalf, the IRS may have just assigned you one automatically. They will send you a form in the mail in January, just make sure you hold on to that form and give it to your tax preparer because they cannot file without that. It's a five-digit PIN, they can't file without it.

Calvin: 3:54

So that's pretty new. I've never really heard of that before.

Greg: 3:56

Yeah, it's becoming more and more common, I probably, you know, last couple of years, I haven't really run across it too much and then last year, I had a couple of clients that you know, we're already everything signed and I go to file it. And I get it kicked back to me saying that, you know, we need the pin numbers.

Calvin: 4:19

Okay. All right, so you got your social and you got your PIN numbers lined up. Then what do you need to get in order?

Greg: 4:24

And then, in January, you'll start getting your W 2s, your 1099s. Other income related forms of dividends interest stuff like that. If you purchased health insurance, this is a big 1 that I always tends to be a roadblock for me. If you purchase health insurance through a, health insurance marketplace. Chances are, they're going to send you a form. It's called 1095- A and I need or people need that to file your return. So that's another roadblock that will kick back or return if we don't include that information in the filing.

Calvin: 4:58

So, Greg, in this topic, I'm used to getting a letter in the mail from Blue Cross or United Health Care, whoever, every year that says whether or not I maintained qualifying health insurance for each of the 12 months of the year. Is that similar to this?

Greg: 5:14

So, it's a little different So you'll still get that I think what you're referring to is the 1099 hc. You will still get one of those, but this is in addition to that. So, this is just people who buy insurance on the marketplace and really like, what's happening is the IRS wants to double check the, if you got a subsidy, they want to double check that with your income. And so, it might be a case where if you made less, they'll give you some money back and give you more of a credit. If you made more money than what you said, and you got a bigger subsidy, they might try to claw back some of that income some of that subsidy. So that's, that's a big one. If you paid estimated taxes, just keep track of that and maybe organize that for your tax prepare, especially those earlier ones. A lot of times I'll be talking to people, and they'll forget that they may be filed 1 and on April 15th. Because that gets confused with last year's tax filing or even June 15th, just because it's, you know, 6 months ago. so kind of maybe go through your checkbook bank account and see, you know, make sure you, you didn't file anything because we definitely want to make sure we get credit for those payments. And then reviewing your documents as you get them to ensure accuracy. So, a lot of times I've run into situations where, someone was maybe working in Florida. For Massachusetts company, and they're withholding Massachusetts income tax, but if you're physically present in Florida, and you're not, you don't need tax withheld. Now we've got a, you know, file a Massachusetts return, just try to get that money back. And is it accurate and stuff like that? So, you know, just reviewing your documents as they come in to make sure that it makes sense. is can go a long way to smoothing out tax season for you and your tax prepare. Now, moving on todeductions and credits and stuff like that. So, if you don't have someone who's helping you with this already, just, compiling your records for deductible expenses. medical bills, charitable donations, education costs, as far as like credits, making sure you get those child care expense, letters from your child care provider. It should be a pretty straightforward request if, you go to your daycare and say, hey, I need a letter from you. With your name address, typically, like, on letterhead, just saying this is how much I paid you this year. it's pretty standard request. So, they should know exactly what you're talking about. If they're not already just automatically doing it. As far as, pulling together all the information, so like our clients receive a questionnaire in January to help kind of facilitate what information needs to be pulled together. But a great source is to review last year's return, just to see, you know, where did I get interest from? Where did I get dividends from? You know, did I have any investments? What can I expect to get this year? And kind of use that as a guide.

Calvin: 8:28

So, Greg, a lot of what we're talking about is for personal returns. Assuming, you know, you get an accurate K 1 from your business. Or, you know, whatever tax form you get for any pass-through tax liability from your business. But, what's the general rule of thumb? I mean, I know business owners don't like to fill out expense reports and save receipts and all that. But kind of, what's the general rule of thumb for, you know, saving documentation for business tax deductions?

Greg: 8:54

So as long as you're keeping accurate records, yes, you should be saving your receipts and, keeping them in, you know, like scanning them and putting them in a, you know, like drive portal to, have them on hand in case you ever need to substantiate any of your deductions. The key now is to take all that information and put it into you know, some form of like summary so that your tax preparer can help you, maximize, you know, any other deductions and, file an accurate return. It's helpful if you have a strong set of books, which is where you come in.

Calvin: 9:36

Persuade the plug, Greg. That's what we try to do. Alright, so what else do listeners need to know here?

Greg: 9:44

So yeah, whether a business owner, you're an individual, And you just get a couple of W2s regardless, you're always going to have your 1040 to file. So back to the 1040 side of everything. Yeah, know, I think it's important to have your, you know, mortgage interest statements, property tax receipts, those don't apply too much anymore, but still important to have, if you made improvements to your home. Big things now are, like, the energy efficient improvements. So, especially if you put solar panels on your house, there could be a pretty substantial tax credit there. Just make sure that if, you did anything to your home in 2024, that is saving energy. At least bring that up so that we can take a look at it and let, you know, if there's some tax benefit there, because it's not just federal. There might be some state incentives as well. And then,if you are a business owner, chances are you have someone preparing your tax returns if you don't. I would strongly advise that you do, because there's a good chance that you're leaving money on the table, but if you are. Just an individual filer, and you haven't had someone preparing your taxes in the past. 2024 isn't going to show us much change, but 2025 probably will. And so I think it might not be a bad idea to start building a relationship with a tax preparer now. Because, you know, if you're working with us 2025. We start, you know, in a couple of days. Prepping for next tax season, right? And so, it'd be good to like start building that relationship now. As far as like tax deadlines to think about, 1099s are due by the end of the month or end of January, sorry. You have your March 15th deadline for S corps and partnerships. You have your April 15th deadline for individual returns and corporate returns. You do get a 6 month, or you can file for a 6 month extension, but just keep in mind that that's an extension of time to file and not to pay.

Calvin: 11:54

So that's an important distinction. Greg, for somebody who doesn't do a lot of extensions myself, the key there is like, you got to still figure out more or less what your tax liability is and pay it, even if you're not filing a final return or else you're on the hook for penalties and interest,

Greg: 12:09

Yep, absolutely. And so if you're. a business owner, you still really have to do, a good part of, the business return, or at least, get to a good number to see what passes through to your personal return. So we file an extension for that and make the necessary payments. Also keep in mind that April 15th is your 2025 Q1 due date. So you might also have,not just your 2024 payment due, but a 2025 q1 estimated tax payment due.

Calvin: 12:39

So hopefully there's some cash earmarked for that, in Q1. So we have the cash on hand to make both the balance due on the previous year plus Q1 estimated returns.

Greg: 12:52

Yeah. And I always give my clients a little bit of a heads up on, hey, here's your tax that is going to be due on April 15th, but also remember You might have this amount do as well, depending on how Q1 goes and, you know, if we need to make a Q1 estimate. If you are going to, think about how you're going to make that payment. Do you need a payment plan? Are you going to, use money that you make in Q1 to make it. And kind of like catch up that way and then we get into. 2025,

Calvin: 13:27

All right. Well, I appreciate the time, Greg. Anything else you want to mention today while we're chatting?

Greg: 13:33

If you are interested in, building a relationship with a tax preparer now. We are definitely taking clients and, we'd love to work with you through the 2024 tax season. That's certainly something that we're able to do, depending on your specific situation. We can get the probably get the returns out by the original due dates but if it's a little bit more complex structure and we want to make sure we get it right the first time We might put you on extension, but it might just be a year one thing.

Calvin: 14:05

Great, and if folks want to book a meeting with you, Greg, they go to SmartBooksTax.com and just pick a time on the calendar there? Is that the best way?

Greg: 14:12

Yep. That's probably the best way to do it. Go to our website and book a time on the calendar through the calendar link there.

Calvin: 14:18

Alright Greg, well thanks for the update and we'll see what plays out with this beneficial ownership information filing requirement.

Greg: 14:25

It keeps us on our toes

Calvin: 14:27

Reference show notes and find other episodes on EmpoweringHealthyBusiness.com. If you would like to have a one-on-one discussion with me, or possibly engage SmartBooks to help with your business, you can reach me at Cal@EmpoweringHealthyBusiness.com or message me on LinkedIn where I am easy to find. Until next time, this is Empowering Healthy Business, the podcast for small business owners, signing off.