Tax time is rough for anyone, but it’s particularly tough for small business owners. While trying to keep up with inventory, shipping, paying bills, and all your other daily tasks, you still have to figure out how to deal with constant tax woes. And ignoring it just makes it worse!
Need some help? Try these tips on for size.
1 | Get a Filing System Going
Nothing hurts your tax time more than not having a filing system in place. If you get started on your quarterly estimated taxes but can’t find anything you need, your stress level is automatically doubled! Gather all your materials and put them in respective folders (receipts, invoices, deductions, etc.) and maintain the system year round.
2 | Streamline Finances
How much did you bring in over the tax period? How much did you pay out to that vendor or to the computer store in that same period? Figuring all this out can be a pain…unless you streamline your finances through some sort of bookkeeping service that tracks it all for you so you just plug in the numbers and go.
3 | Digitize Paperwork
Instead of keeping a paper filing system, consider digitizing everything. This can make keeping track of everything, especially receipts, remarkably easier. One big reason is you can label everything which makes them searchable in your database. If you need all your gas receipts, for example, it just takes a second.
4 | Go Over Deductions
Small business owners miss all sorts of deductions. Did you know any trip counts as a travel deduction – even if it’s to the post office and back? Over time these add up more than you might think. Try to go over the taxable period day by day and figure out every event that could lead to a deduction or credit. Read more about automobile expense deductions here.
5 | Get the Home Office Deduction
Speaking of deductions, did you know you can get a tax break by working from a home office? If you work from home in a dedicated office space, you can deduct a portion of rent/mortgage, utilities, and other expenses. If you work from a non-dedicated place (kitchen table for example), consider moving. It could save you big bucks.
6 | Update Your Calendar
Don’t be caught unawares! Small business owners have to deal with all sorts of taxes, and they all have specific due dates. Every few months a new tax event will rear its head and you don’t want to be caught unprepared. Update your calendar to reflect all the tax due dates that are coming up so you don’t miss anything and get hit with interest or a fine. Don’t forget sales tax!
7 | Find an Accountant
Having an accountant to call on isn’t just for the megacorporations! Every business owner should at least have someone they can call in times of crisis. An accountant will have a ton of advice nobody else can provide, especially if they know your business and your finances intimately.
What are your tips for sailing smoothly through tax time?
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