5 Tax Planning Tips for Your Plumbing Business

Why wait to get a jump-start on next year's taxes? Here's what you can do today.
5 Tax Planning Tips for Your Plumbing Business

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Congratulations! You survived another tax-filing season — hopefully with your sanity and plumbing business intact. Even if you and your accountant have tax filing down to a science, there is always room for improvement — and no time like today to start thinking about next year’s returns.

In fact, prudent tax planning is a year-round endeavor. The more tax-aware you are throughout the year, the smoother things will go for you when it comes time to fill out the actual returns, and the more likely it is that you’ll take full advantage of your potential write-offs and deductions.

1. Keep track of business deductions

For example, take full advantage of deductions: be vigilant in keeping records and receipts of any and all necessary and reasonable business expenses. Many are going to be fairly obvious – equipment, rent, employee salaries — but there are potential deductions you may not know you can claim.

Consider trips where you mix business and pleasure; if more than half the trip is devoted to business, you can write off your travel expenses — a trade show, for example. Also note that business losses can be deducted against personal income.

2. Classify your business correctly

Something else to consider: How is your business classified? If you haven’t classified your company properly, you may be paying an inappropriate (read: too-high) tax rate.

Is your plumbing company a sole proprietorship? A partnership? Is it an LLC? Hopefully you know the answer and are accepting the appropriate tax burdens — but if not, do some digging and figure out your business’ proper standing today.

3. Pay in installments

Sometimes small businesses are hit with larger-than-expected tax burdens, which can prove problematic. In fact, a high bill from the IRS can threaten to capsize your plumbing and drain cleaning business, or do some real damage to your cash flow.

But there is a way around this. If the IRS hits you with a large amount to pay, you can request to pay it in smaller installments rather than all at once. Monthly payment plans are available, and they can be advantageous for small-business owners with narrow margins or already-restrictive cash flows.

4. Start scheduling

The tax-filing season presents you with a lot of dates to juggle and a lot of milestones to keep track of. Start planning your tax season timeline now by getting important filing dates on the calendar.

There are some great tools available to help you with this, including a handy desktop calendar you can download from the IRS website.

5. Enlist help

A final note for plumbing-business owners: In case it needs to be said, taxes are serious business, and not something to be approached haphazardly. The penalties and fees for improper tax returns are steep, and potentially ruinous for your business.

For many plumbing companies, it is a worthwhile investment to hire an outside accountant — a seasoned professional who can remove the guesswork, ensure that everything is above-board, and ultimately get you the best savings.

It may even be prudent to find your tax professional now, because when it comes to small-business taxes, you can never plan too far in advance.

About the Author: Amanda E. Clark is the president and editor-in-chief of Grammar Chic Inc., a full-service professional writing company. She is a published ghostwriter and editor, and under contract with literary agencies in Malibu, California, and Dublin, Ireland. Since founding Grammar Chic in 2008, Clark, along with her team of skilled professional writers, has offered expertise to clients in the creative, business and academic fields. The company accepts a wide range of projects and often engages in content and social media marketing, drafts resumes, press releases, Web content, marketing materials and ghostwritten creative pieces.


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