Prepare for upcoming tax season with business accounting software
January 29, 2013
Tax codes and regulations change frequently for businesses, and with the new fiscal cliff deal implemented, companies across the nation are in the process of making the necessary changes to their accounting policies to ensure they remain compliant with all U.S. accounting legislation. While some firms still rely on manual processes or other traditional methods, many businesses are now using accounting software to maintain efficient control over their financial practices and make sure numbers and figures are accurate. The use of this technology can be especially beneficial when it comes to preparing for tax season, as there are many rules, laws and various regulations companies need to follow. The systems also stay up-to-date on new tax codes and implement changes according to federal and state laws. This means that small businesses are not faced with learning the ins and outs of these alterations, as the software ensures they are incorporated.
New tax breaks and codes for small businesses
Accounting Today highlights some of the new tax breaks and changes that are set to impact small businesses in 2013. Under the fiscal cliff deal reached shortly after the new year, local companies throughout the nation will start to see alterations pertaining to their taxes, the news source explains. This will come in the form of various incentives, one of which is the research and development (R&D) tax credit. This element provides breaks for small businesses that purchase new technology or hire research professionals to further spur innovation within their operations, the source notes. This credit has been in effect for several years now, and the fiscal cliff deal ensures that it is extended at least through 2013.
Another incentive being offered is the Work Opportunity Tax Credit, which is given to local companies that hire either military veterans or people from underserved communities who would otherwise have difficulty obtaining employment opportunities, the source reports.
While these are just some of the credits being made available to small businesses this year, owners can ensure they take advantage of all credit opportunities by using software for accounting purposes.
Managing payroll taxes with accounting technology
Businesses can also effectively manage payroll taxes and other employee finances with accounting software. Fox Business reports that due to the expiration of the payroll tax holiday under the fiscal cliff deal, American workers are now required to pay 6.2 percent of their income to Social Security, an increase from the 4.2 percent paid during the past two years. To ensure that accurate amounts are taken out, and that companies are paying their share, accounting systems can effectively manage these processes.