Financial Compliance and Tax Planning Opportunities

Tax Planning Opportunities

Financial compliance is an area of business that takes many forms and can lead to advantageous tax planning and savings opportunities. Tax, regulatory, and financial reporting compliance are just a few of the areas companies deal with daily. Having a group of knowledgeable specialists is key to ensuring that a company is in compliance with reporting requirements, while also providing beneficial planning opportunities based on the tax and financial compliance needs of the business.

Tax Compliance

Tax is more than just year-end tax return filing. Today’s complex tax laws are affecting even small business owners and can have a substantial impact on the operations of the business. For example, the recent Supreme Court ruling in the South Dakota v. Wayfair case is forcing many businesses to examine sales tax reporting and compliance in their own state and any state they do business or have customers. This change is an opportunity for controllers to reexamine their reporting and compliance systems related to sales, billings, and collections to comply with the new rules and also offers planning opportunities. These planning opportunities can coincide with state income tax planning to take advantage of state tax rate differentials in lower income tax states. Understanding these complex state tax laws is needed to effectively take advantage of tax savings opportunities.

Another area impacting small to medium size businesses is employment tax and the continued focus by the IRS on independent contractor versus employee. The IRS continues to focus on proper classification of employees to ensure that employees are not misclassified as independent contractors. In addition to payroll tax implications of misclassifying employees, there are Proposed Regulations related to the Tax Cuts and Jobs Act that specifically address the classification of former employees as independent contractors.

Financial Reporting

In addition to tax compliance, it is imperative for businesses to stay compliant with their financial reporting requirements. Banks often require CPA compiled, reviewed, or audited financial statements to be in compliance with loan or line of credit covenants. Understanding the requirements of the bank is key in ensuring you have the proper reporting that meets the needs of both the company and the bank.

Regulatory, Including Employee Benefit Plan Compliance

A final area of compliance that can catch a company off guard is employee benefit plan compliance. The array of employee benefit plans available, from defined benefit to defined contribution, employer sponsored, or union sponsored, adds additional complexity to the compliance requirements of each plan.  Having a trusted, knowledgeable provider ensures compliance with employee benefit plan reporting and IRS and Department of Labor requirements, which vary based on the type and size of the plan.

How DHJJ Can Help

The Innovative Services Group at DHJJ has a team of trusted, experienced professionals that handle all areas of tax and financial reporting compliance. Working with business owners and controllers, they can consult on key areas of concern for a business, from state tax exposure to proper footnote disclosure in financial statements. To contact DHJJ’s Innovative Services Group, call 630-420-1360 or fill out the form below.

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