It is one of those words in the English language that most people love to hate… Taxes. But they are necessary and the law says you must.
In today’s post, I am going to give you 7 tips for preparing your small business taxes.
You can cut out a lot of your tax stress by following these tips.
Preparing Your Small Business Taxes Tip #1: Hire An Excellent Accountant
For a small business owner, I suggest you find an accountant that is willing and able to work with you throughout the year. You can find many accountants that will prepare statements and do your taxes but as a small business owner, having an accountant that will track your income and expenses and monitor your cash flow will give you an added benefit ensuring you are operating with a survival and growth goal.
I suggest interviewing several accountants to get the one that is right for you and your business.
Preparing Your Small Business Taxes Tip #2: Keep Detailed Logs
You should always keep logs of expenses with travel, car, office, etc… as they happen. I suggest keeping a log book with you and always keep the receipts.
Preparing Your Small Business Taxes Tip #3: Make Sure You Take Section 179 Property Deductions
It may surprise you the items that can be deducted in this area. I suggest you check with your accountant but property used in any way for your business may be deductible as well as even some computer software.
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Preparing Your Small Business Taxes Tip #4: Your Expenses Should Be Within Range Of The Past Year
If your small business expenses are outrageously higher than the previous year, there is a good chance the IRS will flag you for an audit.
You should take previous year’s tax returns in consideration when filling out the current year.
Preparing Your Small Business Taxes Tip #5: Make Sure You Claim All Income
It has happened to many… A client forgets to send out a 1099 to the small business owner, but they do report it to the IRS. And the small business owner neglects to enter that income in their taxes.
If the IRS catches this, which they probably will, your small business will get audited.
Preparing Your Small Business Taxes Tip #6: Use An Accounting Software
You can make the whole tax process easier on yourself and your accountant by investing in an accounting software. I am not going to recommend any certain one, so just use your search engine and see the great ones there are. Be sure to review their features and I am sure you can find a software that will work great for your needs.
One other thing… That software is probably deductible because it is a business expense.
Preparing Your Small Business Taxes Tip #7: Separate Personal And Business
Of all the tips I am giving you today, this is probably the most important!
I have found that many home based MLM business owners do not separate their personal and business accounts and when tax time comes, it brings a chaotic mess.
By having separate accounts and only spending for business from the business account and for personal from the personal account, the process of preparing those tax statements will be much easier.
I really do hope these tips help you. If you have any questions, feel free to ask in the comment area below.
Now I do need to give this disclaimer: I am by no means a tax professional. I strongly suggest you consult a tax attorney or Certified Public Accountant for the best tax advice.
I want to wish all of you a great day.