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!

Accounting for the New Year

It’s the holiday season and everyone seems to be preoccupied with holiday parties, shopping and merriment all around; this is all great and I am probably one of the people that loves this season more than anyone else. However, tax season is not far from now, only a couple of months away if you really think about it. As a business owner or even as an individual how are your finances right now? Do you know where you stand as far as profits and losses for the year?

These are questions that you should be asking yourself right now, not next year. Once the fiscal year closes, it may be too hard to get tax write offs by making business related investments. If you have employees, you should make sure that you have all your numbers in order because you’ll be providing them with the right tax documentation so they can file in a timely manner. This is something that you should not be left as a last minute task, this needs to be present on your mind right now.

Zoho Books offers a great little cheat sheet for those who may need a little bit of a reminder on the things you’ll need to do before the year closes:

• Reconcile your bank accounts
• Complete your invoicing
• Record all your supplier bills
• Write off bad debts
• Get to the bottom and look for outliers
• Record your depreciation
• Handle prepaid expenses
• Close out the owner’s draw
• Get started with 1099s now

I know getting a lot of these things done before the end of the year can be a little bit overwhelming with the holidays being right around the corner but trust me on this one, you’ll be very happy that you got these done once tax season comes around.

To read the full article provided by Zoho Books, click here.