The beginning of the year is marked by a few familiar occurrences: ambitious resolutions, discounts on gym memberships, and tax forms arriving in the mail. That last one can cause a bit of panic, especially for small business owners, as they signal the looming arrival of everyone’s least favorite time of year: tax time.
The next few months are often characterized by procrastination and a mad dash to file your return on time. But while that may be the norm, it doesn’t have to be. We’ve assembled some tips that will help you breathe a little easier when tax time comes around.
Plan All Year
The fact of the matter is, taxes are a concern year-round. It’s just that they fall off the list of concerns. To get a handle on your taxes, it’s important to first change your perception of them from “once-a-year annoyance” to “ongoing business concern.” As a small business owner, you’ve got a lot of ongoing business concerns, and they all get handled. Making taxes “part of the routine” helps take away their threatening air. Another benefit is that you’ll undoubtedly file your returns more competently. By rushing to file your taxes at the last minute, you’re bound to miss a few deductions. Keeping them in mind all year long will help you see the opportunities you might otherwise miss.
Prioritize Organization and Consistency
The key to getting your tax preparation efforts going is to create a consistent organizational system. Maintain receipts and keep on top of your business transactions, from income and expenses to retirement contributions and charitable donations. Organize by category, by month, or both—whatever works best for you. These records can be maintained in print or online. Increasingly, small business owners are turning to electronic applications. With this approach, you can start your day by taking a quick glance of all transactions and categorizing them accordingly, all while sipping your coffee. Whether you choose to preserve records in print or online, it’s important to maintain backups offsite.
Keep Separate Accounts
As a small business owner, it’s vital that you keep your personal finances and business finances separate. Rather than trying to do that on a transaction-by-transaction basis, we recommend maintaining a separate bank account for your business, along with a dedicated credit card. It makes organizing everything simpler and less time-consuming.
Keep important tax deadlines in your calendar, with accompanying advance notifications if possible. Local, state, and federal tax deadlines often seem like they’ve snuck up on us. But the truth is, these deadlines are set well in advance. By keeping them in your calendar like any other business appointment, you can deprive taxes of the element of surprise.
Use the Right Software
QuickBooks™ is a software application that allows you to streamline many aspects of the tax preparation and filing effort. The program can seem intimidating to learn, but it’s an incredible asset that will help you save valuable time. Steiner Business Solutions offers QuickBooks training to get you up-to-speed.
Consult a Tax Expert
Taxes are a critical part of any business, large or small. Working with a professional tax expert can help you get your bearings and ensure that you’ve got everything in order for tax time. For help with your small business taxes in and around Richmond, VA, contact Steiner Business Solutions at 804.525.4259. And be sure to check out our list of Tax Breaks for Small Businesses.