Tax season is upon as, and as a small business owner tax season can be troubling. Not to worry, we’ve got the details on how you can tackle taxes in seven easy steps.
1. Organize your Receipts
It’s a must to have your receipts in order. This is especially important in terms of business deductions. For example, you may be able to write off services, gas, equipment, and other items as business expenses. For those that hold a W-2 job, it might be possible to claim expenses that have gone unreimbursed, expenses that are incurred by the job. And, if you made a contribution to charity this past year, make sure you can find those records to claim a deduction. The IRS doesn’t forget to double-check those deductions, which is why it’s necessary to save your receipts.
2. Did you Get Married?
Life changes, such as a new spouse or child, can affect your tax status. These changes can change you from a single tax player, to someone who needs to file jointly, or list themselves as head of a household. These life changes provide all sorts of different tax credits and deductions, so in other words: don’t forget to double-check your status if you’ve welcomed someone new into your life.
3. Do Your Homework
Tax season doesn’t always have to gauge your pockets. There are plenty of write-offs and credits available to you. Take for example, the home office deduction, dependent care credit, vehicle deduction, lifetime learning credit, and many more that you could qualify for. Researching what you qualify for is the easiest way to save some money on that tax bill.
4. Know Your Deadlines
If you’re a small business owner who has used the service of an independent contractor, there’s a form for that. Contractors need to be provided with a 1099 forms by January 31st. That’s just a few days away, so make sure to get those out there.
5. Make a Game Plan
How are you preparing your taxes this year? As a small business owner, it’s always a wise decision to utilize the talents of an accountant. Filing business taxes come with more responsibilities than personal taxes. While this may seem like an added expenses, all the write-offs an account can find you often offset this cost.
6. File Away
There are several different ways to file your taxes, ranging from e-filing to old fashioned snail mail. However, if you followed step 5 and had some help from an accountant, leave the preparation and filing to them.
7. Extension Redemption
Not every small business will be able to meet the April 15th deadline, and it is possible to request an extension. However, the big caveat is that it’s necessary to estimate and pay the amount you believe is owed in taxes at the time you file for an extension. If you don’t the IRS could invalidate your extension, and that could lead to a whole lot of fines. However, that accountant we mentioned can you help avoid these types of errors.