We had originally slated this article to highlight tax law changes under President Biden’s proposals and outline how our customers would be impacted by those changes. However, as of the writing of this article – nothing has been passed.
Since there are no significant tax law changes currently passed for 2022, we'll take the opportunity to instead highlight some observations and best practice recommendations that come straight from experiences the last year working with our customers and taxing agencies.
Recommendations
- Receive tax refunds via direct deposit and make tax payments online
- File returns electronically
- Send payments / payroll via ACH / and use direct deposit
Why should you consider these recommendations? COVID has shown us that operating using electronic means whenever possible is more efficient. We’ve seen the mail slowed in some instances, but even when the mail has been delivered in a timely manner, we’ve seen delays with processing it. The IRS is a great example. Amended returns mailed in, tax payments mailed in, and notice responses mailed in many times were not acknowledged for quite awhile. Many times additional notices were issued without acknowledgment of the initial mailed materials. This causes stress for the customer – so whenever possible, we recommend doing things electronically. Refunds are returned more quickly, payments are received timely, and it can reduce notices. - Complete your bookkeeping during the course of the year; don't wait to focus on it only at year-end!
Why? Tax accountants are always extremely busy near the end of the year working with customers – doing tax planning, year end forms, March 1 tax deadlines, and April 15 tax deadlines. This all provides a wave of work to get completed within a short time period for these individuals. This year I have noticed the stress to the farm operation for those that waited to compile all the information. Especially in a year like this, when many farmers have had a profitable year with increased commodity prices, doing the work all year makes it much easier at year- end. Not only does it give you up-to-date financial results that you can use to manage your business operation, it also saves you from the year end crunch. Stress gets added for many
who are facing supply chain issues surrounding your most frequently used “tax planning” expenditures – i.e. equipment purchases and prepaying inputs. Even for those who have been keeping up on their accounting all year and know what they need to spend, it’s difficult to find available equipment or inputs.
Eliminate the stress and help set yourself up for success. Stay up to date on the accounting books during the course of the year. Or if you use a tax accountant to complete your books, turn information into them routinely during the year. Being proactive will allow your tax consultant to help make quicker and better tax planning strategies for you, while also allowing more time to research those year end purchases.
Make the above recommendations your New Year’s Resolutions in 2022. And if you’re already doing all of the above, take your financial reporting to the next level!
Our tax accountants at GreenStone are ready to help you with your tax and accounting needs. Please contact your local branch to set up a meeting with your local tax accountant.
To view the article in the online 2022 Winter Partners Magazine, click here.
