Fold tax planning into your overall business strategy to efficiently tackle your taxes.
For many small businesses, tax season is a grueling time of year. It's often associated with stress, record-combing and exhaustion. This is one of the key reasons why small businesses should be thinking about their taxes year-round and prepare long before it comes time to file. By folding tax planning into your overall business strategy, small business owners can tackle their taxes far more effectively (and may even end up with bigger deductions than they anticipated!). Here are some of the best tips for keeping taxes a priority for your small business 365 days a year.
1. Use the right business tax software.
One of the best ways to ensure your taxes are always a priority for your small business is by getting hold of business accounting software. There are many resources and valuable apps you can use to keep your small business in check and ensure an efficient tax filing process months before it's time to begin filing. For example, Intuit is the parent company behind software such as TurboTax and QuickBooks. These tools can help you keep track of everything related to your business and taxes. By taking proactive measures to be more organized, you can make taxes a smoother process. [Are you interested in finding the right online tax software for your business? Check out our best picks and reviews.]
2. Track all of your spending and have regular budget check-ins.
Aim to track all of your spending throughout the year so that none of your expenses are hard to pin down once tax season rolls around. It's incredible how much you forget when it comes time to file. Noting expenses the day or week they happen ensures you don't miss them at the end of the year.
For some, it helps to have monthly expense check-ins. For others, it is best to go through their spending every week. Get on a schedule to consistently keep track of your business's spending habits. You can also use an app to track all of your spending. If you don't keep track of your spending and expenses, you could be hit with fines later on, or you may lose sight of possible deductions when it comes time to actually file your taxes.
3. Keep your business and personal expenses separate.
Whether or not you have been regularly keeping track of your spending, you should still ensure that your business and personal expenses are always separate from each other. If you haven't already, set up a separate bank account for your small business to eliminate confusion when it comes to spending, and only make business purchases using your business's bank account.
4. Keep important deadlines top of mind.
Stay aware of important deadlines throughout the year to hold yourself accountable. Make a note of all of your tax deadlines, and don't be afraid to set up deadlines for yourself when it comes to your small business. If you want to have monthly or quarterly expense check-ins, keep those on a calendar and set deadlines for when you want to be keeping track of your expenses. Staying organized when it comes to important dates and deadlines will help you when it's time to file your taxes.
5. Hire an accountant or business tax professional.
If you find taxes for your small business overwhelming or confusing, or if you just want another resource, consider hiring an accountant or other tax professional to help. Tax professionals are highly knowledgeable in the field and can assist you with as much or as little as you need when it comes to your taxes. They can also help hold you accountable for everything you need to be practicing throughout the year to maintain smart and legal business practices when it comes to your taxes and finances. Additionally, a tax professional can help you stay aware of hidden fees and documents that you may forget about. Hiring a tax professional can be a great decision for a growing business.