Wouldn’t you love to reduce small business tax stress? Every year at tax time you get that familiar knot in your stomach: tax butterflies, and, for some, out-and-out dread. For small business owners and freelancers, tax time can be a trial.
Tax stress often occurs for a few reasons. First, the small business owner may not have properly organized their business’s finances; secondly, the business owner has to find financial statements, receipts and other paperwork required by the account; and, finally, the small business owner may not understand their tax obligations.
Here are a five tips that will help reduce small business tax time stress.
Flareapps.com small business tip #060Record Everything!
Efficient and complete record keeping is the number one way to reduce yearly tax stress. Your stress will rise proportionately to how disorganized your finances are. If you are keeping records on paper, in various spreadsheets, or worse, not at all, tax time will provoke anxiety. If, on the other hand, you adopt a complete accounting package, and use it, come tax time, you’ll know you have everything you need. Better than that, you have it all in one place!
Flareapps.com small business tip #061File Taxes as Soon as You Can
The longer you wait to get through the pain of tax time, the higher your anxiety will be. If you hold off, because you know how much work you’ll have to do, the stress will increase the longer you wait. If you are use accounting and bookkeeping software, you won’t have the stress of searching for business financial statements documents such as paid bills, income, assets and the like.
If your records are a shambles now, resolve to have a record keeping system in place for the current tax year. Next year (and every year after) you’ll thank yourself for making the transition and will wonder why you didn’t get organized sooner.
Flareapps.com small business tip #062Understand Small Business Tax Responsibilities
As the saying goes “Ignorance is not a defense”. While you don’t have to have an accountant’s knowledge, you should know something about your responsibilities as a small business owner or freelancer. A little knowledge goes a long way toward combatting tax-time stress. A good place to start is the Small Business Administration “Filing and Paying Taxes” pages. There, you can learn about determining your state tax obligations, and your federal tax obligations.
Also check out these excellent IRS business tax pages:
- Tax Information for Business
An excellent resource for federal tax related information, including: tax information for corporations, partnerships, small businesses and self-employed people.
- Small Business Taxes: The Virtual Workshop
9 lessons to help small businesses understand their tax responsibilities.
Flareapps.com small business tip #063Know What You Can Deduct
Learn about allowable deductions. By doing so, you’ll know how to reduce taxable income and the tax-time stress worrying whether some deductions may come back to haunt you. You can learn a lot about deducting business expenses at IRS.
Flareapps.com small business tip #064When in Doubt, Consult and Accountant
Consulting with an accountant or bookkeeper, particularly when you start your business, is a good way to ease your mind at tax season. A professional accountant or bookkeeper can help you understand your tax obligations, what records to keep, and what to provide them at tax time.
The best way to reduce small business tax stress is to be organized. Remember to: record everything, file taxes as soon as you can, understand your tax responsibilities, know what you can deduct, and, when in doubt, contact an accountant or bookkeeper.
Happy small business accounting!