The end of the year is always a busy time for most franchise owners, as they are often managing the holiday rush while also trying to prepare their year-end tax and financial statements for the upcoming tax season. With only a few days left until 2014 begins, franchise owners may be wondering if there are any additional steps they should be taking to put themselves in the best possible position for next year.
Tax laws may change on a yearly basis, as may the credits and deductions that are available to business owners. Although these features may fluctuate, there are several steps entrepreneurs and professionals can take each year to ensure they are maximizing their tax planning and putting themselves in a stronger position.
1. Review expiring tax credits and determine eligibility
Business-related tax credits and deductions can greatly help franchises reduce their tax liability, so it's important to work with a tax preparer before the year ends to determine eligibility for continuing and expiring credits. For instance, restaurant and retail owners may be interested in exploring their eligibility for the accelerated deduction for qualified real property, which is valued at up to $250,000 but expires at the end of 2013. In 2014, the deduction is zero. While many credits and deductions are set to expire each year, and Congress frequently renews them, it may be a good course of action for business owners to assume they will expire so that they can maximize their potential tax benefits immediately.
2. Account for changes in employee benefits
Many franchise owners extend benefit programs to their workers, ranging from health insurance and retirement accounts to year-end bonuses and company perks. It's important for owners to work with a professional to determine how these features will impact their tax liability in the upcoming year. This is especially important if these benefit programs changed in some way - such as offering or canceling health insurance packages for workers.
3. Revisit franchise agreements before making big changes
The end of the year is a good time for business owners to review their franchise contract, especially if they plan to incorporate new ideas or making changes to their company. Revisiting their contract will allow them to establish what they can and can't change under their existing agreement. Additionally, many contracts contain a clause that lets the franchise company change the deal in material ways in the future, so it's important to take this into account as well when making determinations about the company's future.
The Liberty Tax Service franchise opportunity is appealing to a diverse America, and ranked highly for its affordability and potential. Entrepreneur magazine has ranked Liberty Tax Service on its "Franchise 500" list of best franchise opportunities since 1998. Liberty Tax Service is the only tax franchise on the Forbes magazine's "Top 20 Franchises for the Buck." (2012) Our tax franchise is an affordable and viable business choice. Each office provides thorough, computerized tax preparation coupled with superior customer service. For the best small business opportunity in the income tax franchise industry, choose Liberty!