Tips For Hospitals During Tax Season
If you’re involved in hospital administration, you probably have your own ways of coping with the increasingly complex tax requirements that come with the job. There’s a lot to know, and a lot of preparation to do before tax season rolls around. This article will give you a few tips for making sure you’re up to date and in good shape to file this Spring.
1. Assemble a Team
Chances are, you don’t have the time or the expertise required to handle your hospital’s taxes on your own. The best way to avoid a big headache later on is to create a team focused entirely on taxes. If excellence is the goal, filing on time is just one item on your list. You also want to be efficient and orderly, with systems in place to handle the process.
A good team can create a timeline for the year leading up to filing taxes, gathering the necessary information and making sure they’re up to date on the necessary forms and documents. Plus, having such an organized approach to tax season will ensure that the hospital is better prepared for the next year. Having just a few experts around who know what is needed and how to execute it will take a lot of pressure off the rest of the administrative team.
2. Assess Current Practices
If your hospital is still keeping records and files in metal cabinets, it might be time to look into getting an upgrade. The method for gathering the necessary data for completing taxes is just as important as the taxes themselves. Are you able to satisfactorily complete Form 990, or the ASC 606? Chances are, there are weak spots in your system that could use some help for a more efficient tax process. Having good tax technology in place can help with this, reducing the risk of human error at points along the path from gathering information to completing the forms.
3. Remember Other Taxes
Large businesses, like hospitals, will frequently make the mistake of keeping all their focus on the federal income tax. This makes sense, as it’s the largest and scariest by far. But you’ll also have to deal with state income, sales and property tax when the time comes. You can easily find yourself in some trouble by ignoring the smaller taxes and making errors because your focus was elsewhere. Make sure your tax team is prepared to deal with each of these taxes, and take them into consideration when looking at the hospital’s overall financial situation.
4. Don’t Forget Investments
If you run a large hospital, chances are it has accrued a decently sized investment portfolio, with a lot of diversity among the investments. This is a great way to increase revenue for hospitals, but it can create a complicated situation come tax season. Sometimes the forms or other information you need for tax season will be harder to track down, and this can really throw a wrench in the works for your tax team. Make sure the hospital’s financial officers are staying on top of the situation throughout the year, tracking down reports and statements.
5. Stay Vigilant Year-Round
If you’re unaccustomed to the tax situation for hospitals, you might find yourself comparing the process to a private citizen’s tax process. It’s normal for individual people to spend a short amount of time each year focusing on taxes, only turning their attention to it when the deadlines are approaching. But for hospitals, it’s necessary to see taxes as a year-round process that doesn’t really end at any point.
When the bottom line is at stake, it’s important to stay on your toes and continue planning and re-assessing after taxes have been completed and the deadlines have passed. Any businessman knows that taxes have greater financial implications that need to be considered throughout the fiscal year. Putting taxes at the forefront of your hospital’s planning and priorities will set it up for greater success in the years to come.
