As the end of the year approaches, it’s always a good idea to review your tax situation and assess whether there are any actions you should take by Dec. 31 to reduce your tax bill. This year is no exception, and many opportunities are available that may significantly reduce your taxes. However, 2011 also presents some unique challenges.

The IRS has announced a new program that allows eligible employers to voluntarily reclassify workers as employees, rather than independent contractors, for future tax periods. In exchange, the employers’ liability for past payroll tax obligations will be reduced to only a minimal payment. The Voluntary Classification Settlement Program (VCSP) is intended to increase tax compliance and reduce the tax and administrative burdens on employers with misclassified workers.

State legislatures seeking new tax revenues in the down economy are again focusing on sales/use taxes. Much has been written about states’ desire to tax internet sales of tangible personal property (Amazon.com, etc.). However, less noticed has been the states’ increasing taxation of Software as a Service (SaaS) and other “cloud-based” service providers. In the following article, Armanino McKenna Tax Partner Malcolm Ellerbe outlines considerations for SaaS companies seeking to avoid surprises from unexpected sales/use tax liabilities in this dynamic environment.

Manufacturers have used transportation management systems (TMSs) for nearly 15 years. The good news is that these supply-chain-management software systems have evolved and improved. As a result, many manufacturers are leaving their third-party logistics service providers in favor of the more convenient, cost-effective alternative a TMS provides.