It’s safe to say that tax season is one of the most stressful times of the year for small business owners. The thought of writing another check, or the hustle to gather all the necessary paperwork is rarely an exciting task to take on.
You probably won’t ever “enjoy” tax season, but there are a few ways to simplify the process and make your life a bit easier. Just like any major improvement, the power is found in small, consistent, and repeatable steps.
Here are a few small ways to make next tax season easier:
Know What You Need, When You Need It
This may sound elementary, but the main source of chaos during tax season can be traced all the way back to not knowing exactly what you need. Taxes are complicated and especially if you’re a small business owner, it’s wise to bring in an experienced accountant to help you understand what documentation, reports, or files you need to have ready before the deadline.
To get started, the IRS website has a list of tax filing deadlines and will even send you reminders periodically before the date. Missing a filing deadline is the quickest way to attract attention and a potential audit from the IRS.
Next, it’s helpful to understand what deductions you are eligible for and what information you’ll need from your employees or independent contractors to prepare their W-2 or 1099 forms as quickly as possible.
If you have a clear understanding of what is needed and when it is due, you’ll instantly feel less stressed when the new year comes around.
Use a Business Credit Card
This is the simplest way to track your business expenses. Open a business credit card, and be disciplined about only using it for your business expenses.
You can leverage the benefits of credit card points programs or cash back incentives, and most credit cards have an internal tool that will allow you to categorize your expenses to better understand where your dollars are going.
Your credit card statements can be an effective way to keep you accountable, organize your spending, and have access to hard copy proof of expenses if the IRS requests it.
Minimize the Paper
Half the stress of tax prep is keeping up with receipts, forms, or necessary paperwork. Identify what hard copies are absolutely necessary for your tax purposes, and then digitize the rest.
Business credit cards are a great start, but there are also cloud-based platforms you can use to take pictures of receipts and categorize the expense. Ditch the shoebox full of paper receipts, and find the best digital tool for your lifestyle and business.
The hard copy paper documents you do need should be kept in a portable file box. This helps you minimize the paper, which makes it easier to keep organized and drop off with your accountant come tax time.
Next Steps for Small Business Taxes
If simplifying tax season is something you want to accomplish for your business, we are here to give you expert help to get started. Our team is experienced in small business tax services.
We can help you identify deductions you may have missed and offer a general consultation of ways to improve your tax preparedness. Contact us today to get started. Get back to what you do best: growing your business.