Quantcast
Jump to content

Auto Shop Owners: Your End-of-Year Tax Planning Checklist

Joe Marconi

Entry posted by Joe Marconi in Management

1,056 views

 Share

For automotive shop owners, tax planning is an ongoing process. You should meet with your accountant at least once a quarter to review your financials, expenses, major purchases, cash reserve, payroll, etc., and make needed course corrections.

Below is a general list of tasks that should be done by the end of the year to prepare for tax season, which is right around the corner.

  • Schedule a meeting with your accountant and ask if any information, reports, or documents are specific to your business.
  • Update your inventory and run a report for December 31.
  • Review your and your employee’s retirement accounts; fund them if needed before the end of the year.
  • Purchase equipment, vehicles, etc., to reduce taxes ONLY after discussing with your accountant and coach.
  • Check your accounts/receivables and print a report with a closing date of December 31.
  • Prepare a list of any uncollectable debt for your accountant.
  • Prepare your accounts/payables. Determine which bills will be paid in the current year.
  • Ensure that all loan interest income and expense is properly itemized on your P/L.
  • Ensure that all major equipment purchases are properly itemized on your balance sheet.
  • Prepare any investment dividends documents. You may need to wait until January to obtain these documents.
  • Make sure you have all receipts and records for any capital improvements or leasehold improvements made this year.
  • Contact your attorney for any required corporate meetings, filings, etc.
  • Discuss with your accountant how to payout any end-of-year employee or corporate officer bonuses.
  • Ensure that all payroll information and worker’s compensation information are correct.

Remember, preparing now may save you from paying too much in taxes and will relieve stress from your life.

  • Like 1
 Share

1 Comment

Recommended Comments

Transmission Repair

Transmission Repair 401

Posted

All great tips I never had until I met my wife, an accountant, as I've said before.  Prior to that, my bookkeeping and accounting was lame at best.  I just sort of "winged it."  Not a good business practice.  I was also guilty of skimming cash and underreporting income.  I did everything worse than wrong, what I was doing was illegal to say the least.  I was lucky and never had my personal income tax or sales tax returns audited.  I was the type of tax payer the Biden administration IRS would be looking for today.

From 2006-on, I was above board and I was a legal eagle.  Women, by nature, are security-seeking and she is above-board in all her dealings.  My wife used another lesser-known Intuit product to do only tax returns called ProSeries.  Boy was it expensive.  It was $2K EVERY year.  She just spread the cost over her 70 or so clients each year.  You can check it out here: https://proconnect.intuit.com/proseries/pricing/  The software can intake most popular bookkeeping's P&Ls and Balance Sheets and populates all the necessary IRS forms while leaving very little for the user to fill out.  It's almost automatic.

I sure wish I would have had Joe's advice when I was younger.  I only met with my bookkeeper (I didn't have an accountant or CPA) once a year, usually in April.  She would file an extension every time, but I still had to pay the taxes due by April 15th, which I usually didn't have.  I was a shop owner who could have been a poster child for HOW NOT TO DO YOUR BOOKS OR TAXES.  But that was back then.  Things are much better today especially since I've fully retired.  Neither one of us have a side job in retirement.  I feel very lucky to say that and I owe it in a huge part to Joe.  He said you'll never make enough on the sale of your business to retire; you'll only make enough to retire by selling the real estate your shop is in.  I tried to lease the building to the person I sold the business to, but it didn't work out.  Once I heard Joe's advice, I felt and did much better selling the real estate vs leasing it for $11K/mo.  Thanks Joe!

  • Like 1

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

Main Sections

More Sections

Discussion Forums

×
×
  • Create New...