A Tax Projection is an estimate of what you’re going to owe for your next tax return. At Black Sheep, we utilize quarterly tax projections based on historical data, projected income, and expenses so you can be prepared for your upcoming year and understand how your tax responsibilities may change. The next tax due date will come whether you’re prepared for it or not; tax projections are one tool in our arsenal of tax planning that help you save money and feel confident when it comes time to file your return.
Avoid costly surprises
Tax planning is difficult enough in most cases, but it takes on an extra level of complexity for small business owners like you. Without proper planning and preparation, you may inadvertently underpay the IRS throughout the year by, for example, not having enough money withheld from your W-2 paycheck or by not paying in enough quarterly estimated taxes. You may then be hit with underpayment penalties.
On the other hand, without proper preparation, you may end up overpaying on taxes and giving the IRS an interest-free loan that could’ve been reinvested back into your business or used elsewhere.
Tax projections allow you to go into tax season as securely as possible. You can be confident you’re taking advantage of all tax-saving opportunities available to you without the fear of costly underpayment.
Make strategic decisions
Taxes are unavoidable, but at Black Sheep we believe you deserve to keep as much of your hard-earned money as possible. Tax projections are a great way to identify money-saving opportunities in the upcoming year.
For example, a client of ours at Black Sheep mentioned they were looking to buy their first house during one of our tax projection meetings. There are a lot of ways to save on tax when purchasing a house, like deducting mortgage interest or closing costs on a refinance. We’ve also had clients that have had the opportunity to save money by seizing opportunities resulting from changing tax legislation.
You’re already making decisions every day as a small business owner. Tax Projections can show you how each decision may impact your tax responsibilities and you can move forward with confidence, knowing you’re setting yourself up for the most profitable and stress-free year possible.
Keep your accountant up to date
When it comes to taxes, there’s no such thing as overplanning. The more proactive and involved you choose to be, the more you stand to save. The best part about tax projections is that they require very little time and effort on your part for maximum return.
When you get a tax projection done by Black Sheep, you’ll first send us a few pieces of information like your last pay stub and income projections for your business. We’ll take things from there, and you’ll then receive:
- A video overview walking you through your quarterly projection, including how it compares to previous projections and how you can use this information to make decisions
- A link with automatic reminders sent out for any unpaid estimated tax you owe
- Instructions with how to make adjustments to your W-4 if you are paid a salary
Projection is paramount to planning, and planning is paramount to saving. Our mission at Black Sheep is to be an all-year-round support system that helps you stay tax compliant, take advantage of any and all money-saving opportunities, and finally rid yourself of tax season panic. To learn more about how we help you keep your hard-earned money and to join the Black Sheep family, check out our Tax Support page here.