Every year dozens of new tax laws are put in place that give birth to new deductions and credits, while others expire. A well informed tax preparer should know all of these updates and inform you of them, but do not leave everything to them. Keeping yourself up-to-date as well will ensure that you do not miss a thing.
Know your Deductions
As a business owner, you have a whole list of deductions all your own to use. First and foremost, you can write off any expenses necessary to run your business. In order to qualify, the expense must be necessary and ordinary. You might want to run any and all business expense deductions by your tax professional so you know they are okay to deduct.
As you probably already know, running a business requires a lot of documentation. This documentation is your number one tool for filing your taxes, both annually and quarterly. Keep all business-related receipts, copies of client payments, and any other business expense you need for taxes. These documents should be well organized, and easy to access when it comes time to file.
Giving to charities throughout the year will benefit you in more way than one. Charitable donations are always tax deductible, so you can take advantage of that. In addition, as a small business owner, you benefit from the free publicity of listing your business as a charitable donator. For example, donating money to the local little league team could get you a sign on their baseball field. Look into charity options in your community!
Track Tax Times
Do not forget – as a business owner you need to pay not only your annual state and federal taxes, but your quarterly payments as well. Make very sure you have reminders on in your planner or on your calendar for all tax deadlines that concern you.
In addition to being on top of your personal and business taxes, you should keep yourself informed on employee taxes as well. If you enter in some numbers wrong and accidentally put your employee claiming 0 all year instead of 1 as they requested, that is a lot of cash you will be shelling-out come tax time. In addition, it is good to be knowledgeable on employee taxes so that you can provide any employees educated answers to tax questions.
At the end of every year, business owners all over the country scramble to buy things they need for the office, and other expenses for the business to keep them on that tax season. You should do the same! Taking year-end deductions will make it easier to budget, and save you tons of cash.
Hire a Professional
This should be a no-brainer, but with the economy right now, a lot of people are considering doing their own taxes this year. However, this can be a very bad idea. While personal taxes are often pretty simple, business taxes are not. With the constant change in business tax rules, it is difficult to stay updated when it is not your industry. It is also easy to miss things when you have been looking at the same documents for a year. Hiring a professional for your small business’s taxes will be well worth the extra cash.