Tax season is stressful for everyone, but small business owners definitely feel it more than others. Front of mind may be anything from marketing, to hiring, to sales… the list continues. Small business owners wear many hats, and preparing for taxes can easily fall in the long list of to-dos. Let’s dive into a few tips that can help keep you organized with taxes and finances this tax season.
1. Organization is key
Keep everything in order and in line and take detailed notes. Make sure you have either filing cabinets or relevant folders online so that you know where everything is. If you haven’t looked into digitizing receipts, there are now apps that import them directly into your spreadsheet. In addition, make sure your personal accounts are separate from your business accounts. Start a savings account for taxes and be on top of quarterly payments.
2. Embrace Tech
Eliminate paper and use electronic statements. Now is a much better time to be doing taxes than it was years ago. It’s possible to download all of your transactions and keep them up to date regularly. Embracing tech also means investing in quality accounting software. Accounting software helps to improve efficiency and saves you valuable time. The software can be linked to your bank accounts and cut down on manual entry.
3. Stay In-The-Know
2020 was a very different year than most. It’s worth staying informed and going straight to the source – irs.gov. The IRS has plenty of resources like webinars and videos for small business owners. Another straight to the source resource is the US Small Business Administration website. Visit sba.gov. to learn more and tailor all of your advice to the kind of business that you run.
4. Hire the Right Help
The right accountant will help you with more than just your financial statements. The right accountant will help you year-round to track income and spending and monitor your net and gross profits. Accountants can be a crucial part of a thriving business, and as a small business, it’s important to recognize and capitalize on this.
5. Ask the Important Questions
While hiring the right person is important, it doesn’t completely get you off the hook. Note the best questions to ask and what items you need to be fully informed and aware of. Patriot Software recently posted a blog on the best questions to ask your accountant. We’ve summed up a few below.
- What records should I keep?
- What business expenses can I deduct?
- When should I pay estimated taxes?
- How can I continue to grow my business?
Tax season is stressful, but with some careful consideration, you will come out the other side better organized and better able to manage taxes in the future. Make sure to effectively manage your payroll and definitely lean on your accountant to ensure your business is classified correctly. From embracing technology to hiring the right help, this tax season is bound to be more of a breeze than others.
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