Friday, January 11, 2013

Preparing Your Small Business for Tax Season

2012 is over and at the beginning of a new year, it’s almost that time again…tax time. Successful small businesses know what they need to do during this tedious but important process—here’s some tips to get you ready for filing taxes and hopefully save you some money.

Even though the focus is on making money from your day to day operations, you should have all your records in order ahead of time, which means up-keeping your system year round so you don’t have to pay an outside professional to do that for you. You should know what can be written off for your business, such as new equipment and supplies that you purchased throughout the year. You also need to take a close look at how you are calculating your estimated tax payments so you are not underpaying or overpaying. You may think that offering generous employee benefits will cost you too much money, but in reality, the loyalty and hard work you receive in return make it worth the effort. But besides that, it will save you money at tax time because you are not required to pay the employer’s share of payroll taxes on this form of pay.

If you run part of or all of your business out of your home, it’s important to have a designated space that is used as a home office. The reason is that you can receive deductions for this space on rent, utilities, and improvements. There are square footage requirements to qualify, so ask a tax official about these requirements and what can and can’t be deducted. Also, be sure you are filling out the correct forms for the type of small business you have. Speaking of these forms, know that there are different due dates for different forms so double check them on the IRS website so you don’t miss any deadlines and end up paying fees.

Finally, look into websites and apps that will make the tax filing process easier for you—Tax Answers by H&R Block, TurboTax, and EZ Tax Return are a few. Follow these steps and use your organization and experience so that this tax season is easy and stress free.  Make it happen!

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