How to Make Filing Your Small Business Taxes Easier
If you run a company, tax time is always going to be a little work. Even the simplest, most straightforward businesses have more complex reporting standards than your average individual. It’s just how it is.
But while you might never be able to make filing your small business taxes easy … you can make it easier.
Save a little time here. Simplify the process a bit there. While little changes might not seem like much, they can add up in a big way.
The following are a few tips that can make filing your small business taxes easier.
5 Small Business Tax Filing Tips
1. Be a Dutiful Record Keeper
One small business owner haphazardly tosses all of their receipts, invoices and other docs into a box and never looks at them again until late March. Another one takes a little time at the end of each week to sort and organize them, then ensures they’re in order soon after the start of the year. Which owner do you think is going to have an easier time filing their small business taxes in April?
There are clear benefits to making sure you have all the documents you need well in advance — namely, less chance of human error when you file, and thus less chance the IRS will audit you.
2. Establish a Tax Plan
Do you find yourself each April with absolutely no idea how much you’re going to owe in taxes? Do you scramble each December wondering what little things you can do to lessen your tax burden? If so, it’s likely you don’t have any sort of tax plan — a strategy where, at the beginning of the year, you have some idea about what types of credits, deductions and other breaks you should qualify for by year end.
Having a better understanding of your tax situation each year will make filing for your taxes much easier when tax time rolls around.
3. Use a Proper Accounting System
If you are going to file your small business’ taxes yourself, or even if you simply want to stay more organized, don’t try to create a makeshift system in Excel or Google Sheets. Get proper accounting software, even if it’s a basic, free version.
It might not be a perfect solution, and you might even have to pay for it, but we assure you that you’ll appreciate the cleaner data at tax time.
4. Keep Your Personal and Business Finances Separate
One way to avoid a lot of taxation landmines is to not mix your personal and business finances. If you enter late March with a wad of business-expense receipts — some of which came from your business credit card, and some of which came from your personal credit card — you or your preparer are going to have a wild time trying to make sense of it all for your filing.
Also, depending on your firm’s structure, keeping your personal and business finances separate can keep you from being personally liable for your company’s debts.
5. Value Expertise
One of the most basic things you can do to simplify your small business taxes is to stop grinding away at them yourself. Hiring a tax professional will take a lot of time and hassle off your shoulders, and an expert will provide may of the benefits of the aforementioned steps.
McManamon & Co. can do far more than prepare your taxes — we can find ways to minimize your liabilities and help create a plan to maximize the tax code in your favor. Let us make tax time a relative breeze. Call us at 440.892.8900 or contact us online today.
Tags: McManamon & Co., small business, small business accounting, small business taxes, taxes | Posted in accounting, McManamon & Co., small business, small business taxes, taxes