While it’s true that there are a lot of benefits to running your own business, from having more control over your schedule to building a company from the ground up. However, there are also many responsibilities that are not as fun, such as taxes. Though it’s not a fun task, tax preparation is a necessity. In this article, we’ll take a look at 10 tax preparation tips that might help you decrease the stress that comes with doing your taxes.
Separate Business vs Personal Expenses
Often, small business owners struggle to separate personal and work life- but it’s critical that you do so.
Keep Up with Important Dates
You can get a tax calendar for small business from the IRS, which you can use to make sure that you are filing your W2s and W9s on time, making your tax payments, and filing your tax returns.
Make Estimated Tax Payments
If you expect to be paying at least $1,000/year in taxes, it’s a good idea to make quarterly payments.
Get Appropriate Software
Microsoft Excel is a good place to start, especially if you’re a first time business owner- but beyond that, you’ll want to find something with a few more features.
Closely Track Expenses
Keep track of everything you spend that is related to your business- the more you can claim, the better.
Digitize all Receipts
The best way to save your receipts is to scan them in. You reduce your paper clutter and get your receipts organized.
Deduct Home Office
This can get complicated, but it’s an important thing to keep track of when it comes to tax preparation for your business.
Review Last Year’s Return
Your tax return from the previous year can be a great guide for the current year’s tax preparation.
Hire a Professional
The truth is, most small business owners don’t know much about tax preparation- and even if you do, it’s not wise to invest that much time on your taxes. Hire a professional to take care of it for you.
Know it Never Stops
When it comes to business taxes, it’s an ongoing activity- it never ends. This isn’t something you can do once a year and then forget about it.