Tax season can be daunting for anyone, but being a small business owner can add extra stress with the additional responsibility to complete personal taxes, while also preparing your business taxes. Small business owners are some of the busiest people out there, so when tax season rolls around, you’ll need to be well-prepared to complete your taxes in the most efficient, stress-free way possible.
As a small business owner, you wear many hats: an IT pro working on your website one day and an HR manager reviewing resumes the next. Most importantly, you’re the business’s number one expert and cheerleader. Everyone is not an expert on tax code, though. Here are three tips to make sure your tax preparation is as seamless as can be:
Leverage Prep Tools
Eliminate surprises and last-minute stress by using an online checklist to confirm that you have all the necessary documents needed to complete your taxes. Make the tax process as pain-free as possible by keeping records and documents in a safe place and take advantage of online resources, rather than wasting time searching for lost documents or wondering what files you may need to gather. Many well-known, easy-to-use personal income tax software programs, such as TurboTax and H&R Block offer business tax options, too.
Know Small Business Write-offs
There are a number of potential write-off options for small business owners that can lower your taxes, such as home office deductions, startup costs, inventory, office supplies, mileage, software, cell phone, retirement contributions and applicable insurance premiums. Take time to go through any potential return options to make sure you don’t forget any or miss out on the opportunity to save money during tax season. This is especially important for new business owners who may have not considered these deductions before but are now essential.
Know How to Calculate Payroll Taxes
Ensure that your employees’ individual and family withholdings and taxes are calculated correctly by making sure employees complete a W-4 form on their first day on the job. Also, consider hiring a small business accountant to help with your business payroll taxes. The peace of mind and stress relief knowing you’ve got an expert on your side may be worth the extra cost. Use the time you would have spent on your business taxes on something else that will benefit your business. New marketing ideas or extra sales calls, anyone? You could also take those extra “free” hours to attend a networking or professional development event to foster your own growth and connect with other business owners.
Tax time is a great opportunity to do a quick insurance check for your business as you get organized. For example, make sure that your liability insurance is up-to-date and have a copy of your ACORD certificate for the year ahead. Remember, keeping everything in check this year will only make next year’s process easier.