Tax season is a stressful one, especially if you’re a new business owner. Making sure that you have all of the documents that you need and that they’re organized before it’s time to submit your taxes is a challenge all of its own. If you’re a newly started business and you’d like to start off on the right foot with your taxes, here are a few mistakes to avoid this coming year.
One of the biggest mistakes that small businesses make is that they only keep track of the more significant purchases that the company makes throughout the year. Though these are the ones that are more noticeable when looking through statements, the small purchases matter too. Even though it may seem like overkill, do your best to organize all of the receipts and purchases that your business collects so that you have them in case they are needed later on.
Be Honest With Deductions
A lot of consumers will recognize that businesses have the ability to write off certain purchases as deductibles, but as a business owner you need to be able to realize when you’re exaggerating the deductions that you’re making. Overstating your deductions is one of the main reasons that businesses wind up getting audited by the IRS, which can lead to bigger struggles for a business and a lot more paperwork. Working with your accountant, you can determine the number of deductions that are going to be best for your business.
Figure Out Payroll
Money is a big deal, and not just during tax season. As a business, payroll is going to be a significant factor in the taxes that you pay, so it should be organized, and there should be as few mistakes made as possible. In the case that there is a mistake, it should be corrected as quickly as possible. Payroll tax compliance is one of the areas that many new business owners struggle with and can accrue penalties with.
Update Your Records
The last point that we’re going to touch on today is keeping your records up to date. This goes hand in hand with organizing your receipts and finances so that you have everything you need when the time comes to file your taxes. Any documentation that you need to show proof of your business any purchases made, any additional income that was brought in — record it! These are all items that will contribute to the completion of your taxes, so make sure that you’ve got them organized and ready for when tax season comes around.
Hire an Accountant
If you’re in need of assistance with your small business finances or you need guidance during tax season, it’s time to consider hiring an accountant. Accountants have experience with all of the variables that come into play with taxes and can help ensure that you and your business are taken care of at the end of the day.
The team at Laird Tax & Accounting has years of experience managing books and finances for numerous businesses. Learn more about the services that we offer and contact us with any questions or additional information that you may need.