by Mark Lusky
When it comes to tax advice, consider the adage, "Don't take too much advice; you could wind up making other people's mistakes." Too often, tha''s what happens when entrepreneurs, self-storage owners/operators included, look solely to the Internet, media reports, or other "single source" for information.
This is a huge reason to have truly trusted advisors--people and organizations that can serve as the penultimate arbiter of what is and isn't relevant and right for your particular situation. That said, researching the Internet and/or media reports is a great way to start gathering information and intel. It can prompt awareness of good questions to ask, strategies to consider, tactics to avoid, and the like. Here are some tips to help ensure getting the right information for your situation:
-Test your tax advisor about federal tax issues impacting the self-storage industry. If you're not already up to speed on relevant changes, simply Google words to the effect of "self-storage tax changes for 2013," and you'll see a number of results in the "News," "Web" and "Blog" sections. Review and archive reports referencing self-storage, and make a list of questions to ask your advisor.
-Test your tax advisor about more general federal tax changes. Google "tax changes for 2013" or a similar search string, and you'll discover a bunch of reports and assessments related to everything from the impact of Obamacare to the Alternative Minimum Tax.
-Conduct the same process for your state and, if applicable, municipal authorities to see: a) how any federal changes may impact state or municipal taxation; b) additional changes specifically to state and local tax codes.
-Develop a going-forward tax plan for 2013 once you're satisfied that your tax advisor has covered the bases adequately. Optimally, this will occur with your tax advisor's guidance. Even if that isn't an option for financial or other reasons, it's still wise to draft something that can remind and guide you as the year progresses. As we all know the hard way, it's much harder to deal with some tax-related issues at the end of the year-akin to closing the barn door after the horse has bolted.
In addition to offering a reasonably reliable way to vet your tax advisor, perusing federal, state and tax code articles and posts will provide a quick education about tax issues that you might not normally think about or be aware of.
This, in turn, not only helps tax planning for the year, but provides insight about ways to plan for the business as a whole. For example, the Section 179 provision not only survives into the new year, but with higher thresholds than originally projected. According to a recent New York Times article, "This popular provision allows small companies to fully expense many investments in just one year, instead of over five years or more. The amount of investment eligible for immediate expensing grew to $500,000 in 2010 and 2011, but was to fall to $139,000 in 2012 and $25,000 in 2013. The new law extends the $500,000 limit through 2013, and pushes the $25,000 cap to 2014."
If you're thinking of buying a self-service kiosk or other Section 179-eligible items, this may be the year. Of course, check with your freshly-vetted tax advisor to make sure, before spending the money.