By: jnawali
Accounting Services / Tax Services
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Tax season seems to sneak up on everyone every year, no matter how much people try to keep up with it. This is especially the case for small business owners, as they have so much more to provide on their forms. We understand just how tiring tax season can be, especially for first-time business owners. That’s why we wanted to give you a few tips on how to prepare for tax season as a small business owner.
Avoid having messy books
One of the aspects of running a business that gets very complicated is managing the books. If you are a first-time business owner with no accounting experience, books and potentially get very messy very quickly.
This is bad overall, as it can lead to main different issues, including missed payments and lost transactions. However, specifically relating to paying taxes, having messy books can lead to having a very stressful and long time filing your taxes and that might be the least of your worries.
If you have messy books, you could also miss out on potential tax deductions because you do not have the proper paperwork available. You can even potentially be forced to pay more in taxes due to not having the proper forms to save you money.
This is why it is very important to have clean books well in advance of tax season so that it can go as smoothly as possible.
Keep Personal And Professional Accounts Separate
Another mistake that business owners, especially new ones, can make is mixing their personal finances with the finances of the business that they own. This is usually done when business owners use personal funds to pay off some kind of business expense. If this ever does happen, make sure to submit a reimbursement statement to make it so that the expense can still be listed as a business expense. Remember that actions like that should only be taken as a last resort.
Having your personal and professional accounts mixed up can make tax season hard as you will have to go through the work of ensuring that payments were made by your business and not yourself and vice versa. Just like with having messy books, mixing up your accounts can make it so that you miss out on potential deductions and credits, simply because a payment was made from a personal account.
This can make tax season more frustrating than it needs to be.
Hire A CPA
Small business owners will always have a lot on their plate in terms of work to do. As a small business owner you’re usually taking on multiple hats in the business and that’s why having people on hand to help, even if just temporarily can be a massive benefit.
A CPA can take off a massive load from your shoulders in terms of preparing for tax season. Whether you just hire them temporarily every year just to deal with tax time or if you hire them all year round to deal with the issue mentioned previously, a CPA can be an invaluable asset during tax season.
If you are interested in hiring a new CPA for your business, then contact us about a consultation. We’d love to talk to you.