Small business owners are already juggling so much when it comes to building up a company. There's managing all the staff, financials, marketing and many other facets of being a business owner. Unfortunately, all this time spent on managing the actual business leaves very little in the way for tax preparing and planning as a small business. This is crucial for any small business because it can mean a huge surprise come tax season or not being able to smoothly handle taxes without any worries or frustrations.
Tax planning for small businesses can be simple once the steps have been implemented. What kinds of steps should a small business ensure for easy tax filing? Here are a few things to consider that will make small business taxes much easier to handle while still being able to run and manage a growing business.
1) Always Get ahead of Filing Taxes
Tax software or a professional tax and accounting service can help with this part, but it is still something that a small business must remain proactive on. Getting ahead of filing and having the necessary paperwork ready to go will save both the business owner and any accountants from further headaches when it comes to payments throughout the year and during tax season.
2) Maintain and Keep Excellent Tax Records
This will be a life saver in the future. Instead of estimating numbers or doing them at the very last minute, always maintain excellent records. This allows for a smoother time during the tax crunch. Cash flow coming in, cash going out, loans, and everything else in-between relating to the financials of the business need to be expertly and clearly recorded right at the get-go to curb confusion and disorganized records, that can lead to huge tax penalties in the future.
3) Hire an Accountant When Needed
This should be a required part of any small business, but there are independent accountants that small business owners can go to at any time. Doing everything without at least some professional supervision and the know-how of an accountant at hand can lead to missed opportunities on tax breaks and the business having to possibly pay too much. There are tax deductions that accountants will know about that many small business owners never even thought of.
4) Buy More for Better Taxes
This may sound like a weird piece of advice but buying more assets and claiming their depreciation in Section 179 of the IRS code can help small businesses greatly. There is a caveat: receipts need to be saved in order for this to work. However, an accountant can help with the heavy work when it comes to this part to ensure that more money can be saved by the small business.
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