Tax season starts this year on Monday, January 27th. Though filing taxes isn’t everyone’s favorite task, it’s better to get it done early than wait until the last minute. Once you file your small business taxes, you’ll have a better idea of your official budget for the year. Here are some small business preparation tips for this year’s tax season!
Separate Personal & Business Expense
When you first start up your small business, you may find it difficult to separate your work and business expenses. While it may seem easier to just keep all financial information in one place, this can lead to a lot of confusion during tax time.
Mixing expenses can cause the IRS to disallow certain business expenses and also confuses your accounting information. The best way to prevent this is to open a separate bank account for your business.
Keeping close track of your business expenses allows you to better reduce your tax liability. Certain business expenses can be used to reduce your adjusted gross income, therefore reducing the amount of tax money you’ll owe.
Keep track of each and every expense your small business makes, including office supplies, entertainment, travel, advertising, and insurance. Waiting until tax time to try and track your expenses increase the chance of overlooking something.
Remember the Dates
The IRS provides a tax calendar that helps businesses keep track of deadlines for tax season. This calendar includes dates for things like filing W2’s, W9’s, making estimated payments, and filing your return.
For freelance workers and independent contractors, you must obtain 1099’s from the clients you worked for during the year.
Modern technology has made it so much easier to get through tax season. There is expense tracking software that allows you to scan and save all of your small business receipts.
This makes it way easier to organize your expenses when they can all be accessed from one place. Creating digital receipts means you can throw away those paper ones, helping you organize your business space as well.
Hire a Professional
As a small business owner, your expertise may not be in accounting and that’s perfectly okay. Even with the expertise, time is limited when you have a business to run. Rather than stress yourself out about your business taxes, hire a professional to take care of it for you.
An account knows how to file your taxes correctly and efficiently the first time around. Having an experienced accountant on your team can make or break the long-term success of your small business.
Contact PL Consulting Today for Your Accounting Needs!
At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax preparation, budgeting, and more.
Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.
To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/