For all business owners, there’s a certain point in the year that brings a feeling in the pit of your stomach. What are we talking about? Tax season of course! Whether you’re a first-timer or have been through the process before, we appreciate all the duties on your shoulders can quickly become overwhelming. From organizing and gathering receipts to sorting through bank statements and cash flow statements, your stress levels are bound to go out of control.
Thankfully, we’re on hand to help. There are some easy and smart strategies you can embrace throughout the year. This means once tax season looms, you’ll be one step ahead and find the process more bearable. Here are just a few tactics to try today.
Keep Track of Tax Deadlines
One of the best things you can do before tax season is to fully understand when your tax filings are due. It’s wise to note these down on a calendar so you don’t forget. Knowing tax deadlines ahead of time will avoid any last-minute panic and keep you in control. There are all kinds of dates to know about, such as federal income tax return deadlines and Form W-2s deadlines. Other important events include corporate tax return deadlines and when first-quarter estimated tax payments are due.
Separate Business and Personal Expenses
For small business owners in particular, it can be challenging to keep your business and personal finances separate. Some business heads use the same bank account for both. However, this is just going to make things more complicated! The best thing you can do today is to open a separate business bank account. This can make it far easier to differentiate between the two and ensure you’re not paying more tax than you owe. To lower tax expenses, why not consider donating your car to an organization? Car Donation Centers have a guide on car donation tax deduction which could sway your decision.
Keep Good Records
Keeping accurate records throughout the year makes it far easier to file taxes. You need to have detailed documentation of any financial transactions. These could be invoices, receipts, pay records, or bank statements. Trying to account for every dollar can be a minefield, so being organized from the offset is crucial. You may prefer to hire an accountant or bookkeeper to take over the reins, rather than trying to do everything yourself.
Start planning for tax season as soon as possible. Should the first time you think about taxes being when they’re actually due, you’re definitely behind! Set aside plenty of time to study your finances and accounts. This will alleviate any stress or worry that comes with tax bill surprises. You’ll also have a better idea of how much you need to shell out.
If you’re feeling stressed or overextended when tax season arrives, you’re certainly not alone. To make the process less stressful and ensure you come out the other side with a smile on your face, using our strategies above is a no-brainer.