Business in 2015: Arm Yourself With the Right Tools for Tax Season

Being a small business owner usually means doing a lot of the work yourself, on top of everything taxes can be a handful!  As long as you follow a few basic rules, you don’t have to sweat tax season at the last minute.

Get An Accountant.  

When you first open your business or shortly after you can afford it, get one. They can set you up with a system to keep all of your records for the year, whether it be paper or an electronic filing system, having accurately dated information is very helpful.  They’re very knowledgable and current with tax laws that may benefit your business with new tax breaks!  Also, they can inform you about what filing system might be best suited for your small business; filing monthly, quarterly or just annually. 

If you have employees, file the right forms.

Making sure you have all the right forms can protect you and your employee when tax season begins.  Have your employees file a W-4, and you can immediately begin withholding wages for tax purposes.  Contractors fill out a W-9.

Keep records, keep records, keep records.  Did I mention, keep records?

You never know what may be deductible for the tax year.  Keeping detailed income records is vital.  Gross receipts, inventory, investment interest, etc.  What also may prove helpful is keeping track of office expenses like rent, business vehicles, travel expenses even down to parking receipts.  The list goes on, just think, if you’re doing something for your business like just running to the store for paper clips, write down your mileage, keep the receipt for the paperclips.  Keeping track of employee payroll and contributions, legal fees and business insurance is also important.

Pay yourself.

Document how your salary is decided.  In most cases it is not legal to pay yourself with the entirety of the profits.  Pay yourself, and use the rest to increase your equity.

Finally, decide in advance how you want to prepare your taxes

You can use e-file or software, a CPA or a tax preparer, or do them yourself.  Request all the tax forms months in advance.  If you’re prepared, you can avoid incurring late fees.

As your business grows these things will become like second nature and keeping organized will seem like a synch.  Dreaded tax season won’t seem so bad after all!