Written by: Mark Koch—National Director of State Income Tax

If you oversee your company’s finances, you may be wondering if you are paying too much in state income and franchise taxes or concerned about potential risks and exposure in your current tax filings. Either way, your company could benefit from a state income tax health check—a comprehensive review of your unique tax situation performed by a team of experts.

A state income tax health check helps you identify and pursue opportunities for tax savings, reduce audit risk, and ensure compliance with the latest state tax laws and regulations. This health check can also help you plan for future changes in your business operations, such as mergers, acquisitions, expansions, restructurings, or divestitures.

But how is a state income tax health check conducted? And what are the benefits and challenges of doing so? Here are some steps and tips to help you get started.

Choose a Qualified Provider

A state income tax health check requires a high level of expertise and experience in state tax matters, as well as access to the latest research and technology tools. You should look for a provider that has a proven track record of delivering value and quality to clients, and that can tailor the scope and depth of the health check to your specific needs and overall business objectives. You should also consider the cost and timing of the service, and the availability and responsiveness of the provider’s staff.

Gather and Share Relevant Information

A state income tax health check involves a detailed analysis of your tax filings and supporting documentation. You should be prepared to supply your provider with relevant information, such as:

  • Prior and current period state and federal tax returns
  • Apportionment data
  • State modification details
  • Financial statements
  • Organization charts
  • Descriptions of your business operations and transactions

You should also communicate any areas of concern or interest, such as potential tax issues, audit exposure, planning opportunities, or legislative changes.

Ready to streamline your tax processes? Book your state income tax health check now!

Review and Implement Recommendations

Based on the information you provide, your provider will perform a thorough review of your state income and franchise tax footprint and identify any opportunities for tax savings, risk mitigation, or process improvement. Be sure that your provider presents you with a report of findings, which will explain the rationale and methodology behind each recommendation, as well as the estimated tax impact and implementation steps. You should review the report carefully and discuss any questions or feedback with your provider. You should also decide which recommendations you want to pursue and work with your provider to implement them in a timely and efficient manner.

Monitor and Follow Up

A state income tax health check is not a one-time event, but an ongoing process. You should monitor the results and outcomes of the recommendations you implemented and measure the actual tax savings and benefits achieved. You should also follow up with your provider and the state taxing authorities to ensure that any amended returns, refunds, or payments are processed correctly and that any audit or compliance issues are resolved satisfactorily. Keep in touch with your provider and update them on any changes in your business or tax situation, so they can provide you with continuous support and guidance.

A state income tax health check can be a valuable investment for your business, as it can help optimize your tax position, reduce your tax burden, and enhance your tax compliance. However, it requires careful planning, execution, and monitoring, and the assistance of a qualified and trusted provider.

Why Choose DMA for Your State Income Tax Health Check?

With over 30 years of state income tax experience and expertise, DMA is a leading provider of a full portfolio of state income tax services, including health checks. We are well-versed in the state income tax laws, regulations, and policies across all states and the District of Columbia, and we monitor the latest developments and opportunities that may impact your business.

We have partnered with many clients to achieve significant tax savings, refunds, and credits, while enhancing their tax compliance and risk management. Our team delivers personalized and responsive service, and we collaborate effectively with your internal tax team and external advisors.

DMA has a value-based and transparent fee structure that aligns with the results and benefits we provide, not the hours we spend. We have established long-term relationships with many of the world’s largest and most respected companies, who rely on us as their partner in attaining their tax objectives and optimizing their tax position.

Choosing DMA for your state income tax health check means choosing a partner who can offer you tailored and comprehensive solutions while ensuring exceptional value and quality.

Take Control of Your State Tax Strategy

Schedule a state income tax health check with our team of experts and uncover opportunities to save money, reduce risk, and ensure compliance.

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