Tax Season Reflections: Strategy, Deadlines, and What Comes Next
This week’s insight celebrates Tax Day and all the joys that come with it.
My CPA friends will take much-deserved vacations in the weeks ahead—once April 15, 2025, is history. You, too, are probably glad to have all your documents sorted, data entered, and returns filed to the IRS. Small business owners often face headaches completing so many requirements. For those who plan and work with a financial team to strategize, there’s actually a bit of satisfaction and maybe some smugness knowing that you legally and ethically kept more of what’s yours.
But perhaps you are not as on the ball as some of Clear Harbor’s clients. The first thing to ensure is that you meet IRS deadlines—quarterly tax payment dates, filing cutoffs, and state and federal reporting rules. Crucially, if you face a tax bill you can’t pay, don’t ignore it—just file on time and then assess your payment options. You can do that on your own (the IRS website provides boilerplate resources and guidance) or meet with a CPA who does tax or an enrolled agent (EA). While the IRS late-payment penalty is like a slap on the wrist, punishment for missing filing deadlines is harsher.
Zooming out, our blog harps on taxes (for good reason), but it’s usually a bad move to allow taxes to determine your every business move. Taxes are a byproduct of strong financial results, both personally and with your business. Pay them, and focus on growing your enterprise—that’s a much better path toward growing your wealth, as opposed to spending hours to save a few hundred dollars on federal income tax.
The elephant in the room is what happens with today’s tax rates. If Congress does nothing, we’ll revert to pre-2018 rates. Good news there: Last week, the US House of Representatives approved Trump’s budget bill, potentially paving the way for an extension of the 2017 Tax Cuts and Jobs Act. It remains to be seen if the corporate tax rate is reduced, but it’s unlikely individual rates will drop. Something to watch.
Lastly, as we say goodbye to tax season, don’t bid adieu to your tax documents. The rule of thumb is to keep them for seven years in case of a full-blown audit or a smaller-scale IRS inquiry. Maintain detailed records of business expenses, charitable donations, and home repairs. When communicating with Uncle Sam, use certified mail and keep receipts. Simple stuff that can save time and headaches later on—particularly if the IRS workforce is slashed by DOGE, as interacting with the IRS could take longer than in the last couple of years.
