4 Tax Tips for Small Business Owners Determined to Pay Only Their Fair Share
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It's long past New Year's Day7 and that means tax season in quickly approaching. Business owners across the nation will be spending the coming weeks sorting through accounts and records in an effort to piece together a picture of their business’s finances over the past year. I know how frustrating and tedious this process can become, so here’s a few tricks to calm the chaos.
1. Prepare as you go
You would think this kind of advice should go without saying, but it’s surprising how often it goes ignored. Don’t wait until the last month to start to tally expenses, revenues and other financial records, as this will only contribute to the overwhelming and confusing nature of business taxes. Make sure your accounting department, or whoever handles your books, is keeping track of every transaction in as close to real time as possible, to prevent human error and forgetfulness.
2. Familiarize yourself with small business tax deductions
If you take care of your own books and business taxes, this tip is for you. Having a bit of knowledge about the small business tax deductions that you your business may be able to take advantage of will be prove to be invaluable -- especially one tax code in particular, Section 179. This tax code allows small businesses to deduct the cost of qualifying equipment that was purchased or financed and put into use in the same year, up to $500,000.
Business owners in all industries nationwide make use of helpful online tools, such as our Section 179 calculator, which provides users with an instant estimate of what they can deduct from that years’ taxes. Many of those business owners finance equipment to take advantage of the tax write-off.
3. Pay attention to important deadlines
There are hundreds of different tax deductions and tax credit filing forms, many of which have deadlines in which they must be filed by. This doesn’t include any ancillary forms to these filings, which will have their own deadlines. Keep track of important dates by keeping them on a calendar, and check that calendar frequently to ensure you know what due dates are approaching -- and are aware of those that are on the horizon. The last thing you want is to miss a deadline for a filing that could provide your business with a huge deduction or credit.
4. Consider hiring a professional
Spending the extra coin to hire a professional can be well worth it for small businesses. Deductions and credits change every year, so working with a professional that keeps up to date on these variances can maximize your deductions and minimize any human error associated with doing your own taxes. Plus, you’ll spend less time counting and calculating, and more time attending to other departments of your company that could use your undivided attention.
Owning a small business requires never-ending perseverance, but that perseverance can be incredibly rewarding. Business success is attainable through preparation, due diligence and sacrifice. My tips are designed to make each tax season easier for you, so you can spend more of your time focusing on growing and expanding your business, or simply enjoying the fruits of your labor.