The vast majority of small business owners are concerned about preparing to file their taxes. Lack of experience in certain tax areas is one of the main causes of stress.
On the days of the deadline, the constant change in laws, the complexity of regulations and the risk of penalties are one of the biggest problems we all face. The following tips will help simplify the process, alleviating the stress that comes with this time of year.
1.- Make the most of available resources: There are experts in accounting for small businesses. The first step in identifying the right person for your business is through peer referrals or a trusted banker. Once identified, your working relationship should be communicative, strong, honest and consistent, not just in the tax season, but throughout the year.
2. Educate yourself about changes: Make sure you are aware of any new laws or changes in regulations that are implemented or as some say, imposed on you each year – both at the federal and state levels. For example, beginning January 1, 2017, the IRS changed tax rates. In addition, with a new administration, there will likely be more changes that will affect small business owners this fiscal year. Be sure to keep abreast of any changes that may be necessary in the required time frame.
3. An easy and important course of action taken will not only help small business owners during the tax season, but throughout the year. There are platforms and tools available to help you stay organized in all aspects of your business, such as account management, expenses and payroll. In addition, it is necessary to analyze beyond the ordinary expenses. For example, if you use your car for commercial purposes, you could easily use one of the available applications to account for mileage used to travel to your work place or work related activities.
Keep proper records throughout the year, helps you estimate your quarterly taxes and avoid surprises by April 18.
4. Benefit from technology: Technology has become a big part of our lives, so it should not be different when it comes to taxes. There are countless types of software that help with creating tax records, tracking expenses and reporting deductions.
Technology not only keeps you organized, but is also there to help you. The IRS has a great application called IRS2Go, which helps answer questions throughout the year.
For more tips on how to prepare for and save this tax season, check out the Bank of America Small Business Community tips page.
Bank of America, N.A. Provides materials for informational purposes. Consult your tax advisor, as neither Bank of America nor its affiliates nor their employees provide legal, accounting or tax advice.