Tax time – two words that many small business owners hate to hear! By putting a few strategies in place, you can save yourself a headache down the road. Below are five simple steps to reduce the anxieties of tax season.
- Don’t guess. Taxes are complicated, especially if you’re a new small business owner. This is one area where it may be best to enlist the services of a professional, such as a certified public accountant (CPA). If you’re handling taxes yourself, be sure to educate yourself by utilizing reputable resources such as irs.gov or sba.gov.
- Know your timeline. Tax deadlines for businesses are different than those for individuals, and different business structures have different timelines. Make sure you know what type of business you own (partnership, LLC, S corporation, etc.) and make a note of relevant dates. This information is readily available on the websites listed above, as well as through financial education sites and services.
- Have your documents in order. Preparing your taxes is easiest when you know where all your documents are and what they represent. Having all your relevant information available and organized is crucial to ensuring your taxes are filed correctly.
- Don’t mix business and pleasure. As a small business owner, you might feel everything you do revolves around your business, but the IRS won’t see it that way! As you sort through your expenses, make sure any questionable transactions have backup documentation.
- Take notes. As we said, taxes are complicated and the process may be a bit messy, especially if you are a new business owner. Make a note of what things worked well – and what didn’t – to adjust your efforts for next year.
Tax season doesn’t have to create anxiety. The right planning, action and guidance can help you breathe a little easier. Best of luck!