Tax seasons always seem to bring a sense of foreboding to small business owners. It is one of the busiest times of the year, and many are still caught unaware despite knowing that it is inevitable. One of the reasons why some businesses are struggling to cope is that they are working for themselves while others are taking it in a stride as they are working for employers. Taxes are very simple if you are but an employee—the employer makes the contribution based on your wages, and all you need to do is provide them with the paperwork for your personal taxes.
On the other hand, business owners, especially those new in the industry, can become overwhelmed with the conversations with accountants, tax forms, varying state tax laws, and others. We relate to the challenges that small businesses face during this busy season, so here are some tips to help you ease through the phase.
Keep Things Organized
One of the things that you can do for yourself and your business is to stay organized. It is not just for the tax season, but make it a point to keep everything organized throughout the year. Keep receipts in order and ensure that the books are balanced. This means that you will not be scrambling when the tax season comes around. Balanced books are also crucial, especially during this period. Your expenses in sanding and refinishing your wood floors should be well-reflected in your books. Whether you are working with accountants or doing your own filing, all your expenses should be balanced, though mistakes are always possible. You can avoid this when everything is kept organized at any time of the year.
Allot Time for the Upcoming Busy Season
Now that you are in the business sector, you have to understand that you have to invest time preparing your tax documents to ensure that it is precise and balanced as needed. Hasty preparation can lead to penalties from the IRS and the missed opportunities for deductions. If you are working with a firm to prepare your taxes for you, you have to help them with anything that needs clarification. Handing out your papers to them and disappearing should not be practiced as the business becomes more open to mistakes. Afterward, check the output before you turn them in. Always keep in mind that even if you are paying some people to do the tasks, your taxes are still your responsibility.
Know the Changes in the Laws and Requirements
When it comes to taxes and finances, it also pays a lot to be updated when it comes to possible changes in the tax laws and requirements. As it is the goal of a business to grow and flourish, you have to ensure that you are complying with all appropriate changes in your tax requirements. The structures differ in each state, so your taxes in California are not the same as those in your New Jersey office. If you can do it, you might want to settle your base in a state where there is a lower tax requirement. But of course, this will require a new set of paperwork and additional workload for your accountant.
Master the Art of the Tax Information Slip
Different states will have different tax information slips following their local tax laws applicable. This document will need your Statement of Pension, Annuity, Retirement, and other income. As an employer, you need to put a deadline for your employees to comply with these documents so that you are prepared to do your taxes and be able to submit them before the deadline. If you miss out on the submission, you might have to pay penalties set by the government.
Relax and Don’t Get Overwhelmed
Sometimes, the volume of paperwork is too much to handle, especially if you are new in the industry. Take some time to relax and take it easy. It is why you need to allow ample time before and during tax season. Whether you are doing it or having an accountant to do it for you, it is best to be available during this period. If you are worried about something, ask questions from experienced tax preparers so that you can fix any problem before it’s too late.
Use Online Tax Portals
A huge advantage of today’s taxpayers is the availability of online portals for tax payments. Now, various states offer a safer, faster, and convenient way to pay your dues as opposed to the old-fashioned method of lining up and waiting in a queue. Some of the methods available for taxpayers and business owners include online banking options, Interact Online, third-party service providers, and bank-to-bank transactions.
Taxes are often considered a headache trigger for businesses around the world. It is never fun or easy to handle tax requirements, especially if you are just new in your online business. However, you will soon get used to the process and discover ways to make it easier for everyone in the company, including yourself. With these simple tips, may you have a pleasant and problem-free tax season this year.