As we approach the end of February, we have already passed a few key deadlines that affect S-Corporations. From informational 1099 forms to W2 processing to other payroll filings for 941s, 940s, and state unemployment, January 31st continues to be the first marker of the seemingly constant to-dos throughout the first quarter of the year for businesses.
As we move past the first few weeks of the year, the focus for S-Corporations shifts to the March 15th income tax return deadline.
For some organizations, this may be their first year preparing for the March 15th deadline with an outsourced accounting team. As with the January deadlines, working with an outsourced team can help alleviate the stress that comes with the March deadline.
Closing the accounting records for an S-Corporation can be a daunting task given the large scope of responsibilities a business owner and/or small administrative team must handle throughout day-to-day operations. For S-Corporations that partner with an outsourced team, these important business figures are able to redirect their focus and energy towards key business functions while their outsourced professionals efficiently and expertly handle the numerous tasks associated with the March 15th deadline.
With an outsourced team, complicated and arduous tasks, such as finalizing accounting records for the tax year in question, are handled seamlessly with little to no interruption to regular business operations. While S-Corporations with traditional in-house accounting departments may spend invest lots of time and resources into preparing for the March deadline, outsourced accounting teams will handle tasks including recording, adjusting, and reconciling general ledger accounts, updating and maintaining fixed asset records, and obtaining other information for the business’s income tax returns. Formal financial statements are compiled using cloud-based software to provide each client with their own specific statements which can either be retained internally for management use or provided to external users for any number of purposes such as bank commitments or applying for funding on a new piece of equipment. Not only do these teams help simplify the deadline processes, but they will also provide you with continuous guidance and advisory services rooted in years of industry-specific experience.
An outsourced team helps bridge the gap between the accounting records and the tax return. The outsourced team’s dedicated controller provides the finalized financial statement information to the tax accountant allowing the process of tax return preparation to begin. However, the role of the controller is not limited to simply handing off the information. Continuously throughout the tax return process, the controller will check in with the tax accountant, including answering any questions raised through tax preparation and communicating the status of the return process with the S-Corporation owner(s). Most importantly, the use of an outsourced team allows the tax accountant to begin preparation knowing the accounting records are in clean shape resulting in minimal if any, changes to the accounting records apart from tax-specific entries potentially saving on tax return preparation costs.
In some cases, an S-Corporation may bring on an outsourced controller who has income tax return experience and can assist in tax knowledge, planning, and other areas specific to their industry and/or accounting records. This is particularly useful when preparing for a large deadline like March 15th.