Running a business can be incredibly lucrative, but it takes a lot of work. You will spend countless hours focusing on everything from reducing your costs, expanding your product line and finding new customers. However, among the most important things for business owners to keep in mind are taxes.
If you fail to pay taxes for your business, you could find yourself in a lot of trouble and dealing with a lot of fines and penalties. If you need a little assistance come tax time, you’ve come to the right place. This article is going to go over a few helpful and simple tax tips for entrepreneurs and business owners.
Know Your Responsibilities
The first thing you need to do is be aware of your responsibilities when it comes to taxes. Different businesses in different industries may have different requirements, so be sure to research what is required of you. Also, different states have different rules, so do your homework there as well.
The internet is a great resource and you can quickly find out what you are responsible for paying. Once you are aware of the things you have to do, be sure you actually know how to do them. For example, you may know you need to provide a 1099, but you need to make sure you know how to fill out a 1099, too.
You definitely don’t want to miss certain tax-related responsibilities, as they can come with hefty penalties and fines that you could be stuck with.
Find Ways to Reduce How Much You Pay
Small businesses can also find ways to reduce how much taxes they pay every year. With the right deductions, you can lower your taxable income, which will also lower your taxes due.
The good news for business owners and self-employed individuals is that there are actually many costs that are considered as tax deductible. You can often deduct expenses such as start-up costs, office supplies, rent, business travel, and employee salaries and benefits.
Each of these will reduce how much of your income is taxable and can greatly lower the amount of taxes you need to pay. In a similar vein, businesses should also be aware of any tax credits they may qualify for. There are a variety of small business tax credits available for businesses to take advantage of. Be sure to find and fill out the appropriate forms to make sure you can actually be awarded the credit by the government.
Consider Working With a Professional
If you want tax time to be easier and more efficient, consider working with a tax professional. These are experienced and educated individuals who deal with taxes day in and day out. They can make sure you aren’t stuck paying more than you should and everything is filed correctly.
If you provide them with the documents, receipts, and information they need, they will handle the rest. This takes a ton of work off of your plate and allows you to continue to focus on your business itself.
Sure, they will often come with a cost, but the time you save in simplifying your tax filing makes the costs worth it. Be sure to shop around a little and compare different accountants in terms of their experience, where they specialize, how much they charge, and their usual turnaround time.
Making Tax Time Easier
Tax time can be a stressful time period for small businesses and entrepreneurs, but it doesn’t have to be. These tips can ensure your small business is tax compliant and you don’t get penalized, fined, or stuck paying more than you need.