When it comes to small business taxes, there is a plethora of resources out there to help you manage and submit your taxes with confidence. However, that doesn’t mean that tax prep is easy and straightforward every year.
As small business owners ourselves, we have felt the pains and struggles with preparing our taxes in the past and have been determined to learn all we can to make this process easier for ourselves and our clients over time. While we are not accountants personally, we have thankfully been able to work closely with the best ones out there who have carefully held our hands through many tax seasons.
While each business is unique and your eligibility for tax deductions, credits, expenses, and income varies, there are a handful of things that apply to ALL small businesses when it comes to filing your taxes. Take a minute to study these tips below which we feel can help you as a small business owner whether this is your first time filing, or your tenth!
3 Important Tips for Navigating Small Business Taxes
1. Organize All of Your Financials
While not a requirement to be proficient in Excel spreadsheets or have a deep knowledge of best tax practices, the one area that will save you as a small business owner when it comes to taxes is organization. Keeping all of your financial records organized and tidy is a must!
Each person is unique when it comes to how they like to organize their financials, but we recommend finding a system that works for YOU and sticking to it. Consistency with organizing your financial information for your small business is key to avoiding a hairy tax filing process.
Things to keep organized within your small business financials include:
Monthly income
Monthly expenses
Payroll
Donations
Goods & Services purchased
Travel expenses
If you’re new to organizing your finances, we recommend starting with weekly organization until you feel comfortable and confident keeping track of all of your financial info. Once things are naturally organized and easy to maintain, you can scale back to monthly organization of all of your numbers.
Consider checking out Quickbooks or Freshbooks if you’re looking for simple and effective business finance organization tools!
2. Hire an Accountant You Can Trust
There is no shame in shopping around for the perfect accountant for YOUR business. While there are a lot of accounting firms that promise exceptional accounting and / or bookkeeping, it’s important to meet with you potential accountant and discuss exactly what they can do for you and their experience.
We have found the most success in working with an accountant that knows small business tax and specifically, digital marketing businesses. Having someone that is a specialist in your field will only yield better results for your tax filing and process. Don’t be afraid to ask your potential accountant if they have specific experience in your field of business!
Additionally, it helps to have good report and a positive working relationship with your accountant, so consider a soft “interview” during your search. You want to make sure you like the way your accountant communicates, delivers information, and / or gives financial advice so that you are not uncomfortable during your exchanges. You don’t have to become best friends, but keep in mind that you may communicate frequently throughout the year so a healthy relationship is ideal.
3. Don’t Wait Until the Last Minute
If procrastinating organizing and filing your taxes was an Olympic sport, you could find us having competed a time or two in past years. But the truth is, this only hurt us and made us WAY more stressed.
Yes, this requires staying organized throughout the year and not letting your books get too far behind. Yes, this requires diligence with record keeping and sometimes, picking bookkeeping over working on other more exciting projects. But take it from us: you won’t regret taking the time to organize your financial information monthly and communicating with your accountant regularly throughout the year because this will eliminate a TON of stress that could enter your life when the tax deadline rapidly approaches.
Start early in the year with asking your accountant for a tax organizer or summary of what will be needed to submit your taxes. Communicate any changes or updates to your business that may influence your status, deductions, or annual income. Be thorough in tracking your expenses to receive maximum deductions. These small tips can help you be a confident, proud small business tax filer with little to no stress come tax season.
We hope this advice helps you rock another year of your business and especially filing your taxes! Even though “taxes” can seam scary and intimidating, they are really very manageable when you apply this advice!
Read about these other tips to helping your business be as successful as possible: