Big or small, no matter who you are, you must file your taxes. The deadline for filing is rapidly approaching so it’s not too early for a small business to get ready. What can you do to make this as painless as possible? Here are a few tips that can help:
- Recordkeeping. Keep a close track of your business expenses and enter them into your accounting system as soon as you can. The longer you wait, the more likely you are to forget. Keep in mind, this is a situation where accuracy is key.
- Keep business and personal expenses separate. This entails keeping separate checking accounts and credit cards. It will only serve to confuse and elongate the process if you have to backtrack and separate your expenses after the fact. Save yourself the stress and keep it separate from the beginning.
- Capital expenses. If it is a new business, owners can write off all expenses that took place before the business officially opened for operation. The IRS defines ‘startup costs’ as deductible capital expenses that are used to pay for expenses that can include investigating the creation or acquisition of an active business. They can also include the costs related to examining a new market, analyzing production, and costs visiting prospective sites. Be sure to check with your tax advisor if you have questions.
- Get educated. In 2010, the Small Business Jobs Act was signed into law to help alleviate some of the tax burden placed on small businesses. Review with your accountant or tax preparer to ensure that you are taking advantage of these deductions. They can save you money!
- Remember it. Keep in mind as you go through the year that you will have to file. Prepare and plan for it early. Keep your eyes open for opportunities to claim a deduction and record it as soon as you can. This will make it easier when the tax deadline arrives.
Tax time is not the most fun time of the year but it does not have to be the most miserable one either. The key is to alleviate the pressure early on. Do what you can at every stage of the year to be as prepared as possible so when it is time to file the work is already done.
I would like to thank Ashley Morales for her help on preparing this article with me. Ashley is a Marketing Intern at Consultants 2 Go, now called C2G Partners and student at Rutgers University. Don’t forget, you can email me at Peggy@Peggymchale.com with any questions you might have and I’ll be glad to answer them. You can also follow my business and me on Twitter @peggymchale and @C2G Partners.