Any business owner knows just how frustrating it can be to pay what seems like mountains and mountains of taxes every single April that rolls around. Tax season seems to be synonymous with losing hard-earned cash that you worked so long to bring in.
Consequently, it makes sense that you want to do everything you can in order to reduce your tax liability. If that resonates with where you’re at in your business journey, then you’re in the right place.
In this article, we’re going to provide you with some small business tax tips that you can start implementing today.
Keep All the Documentation
The first thing that you need to keep in mind as you try to make the most out of this season is something that you actually need to keep in mind throughout the rest of the year. That is keeping all of the financial-related documentation you can.
Whether it’s related to employee tax withholdings, business transactions, revenue coming in, or capital expenditure, all of those transactions should be documented and held on to. This will make filing business taxes so much simpler down the road, as you’ll have all the information you need at your fingertips.
In addition, should you ever get audited (knock on wood), having this documentation on hand could save you some fines.
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Pay As You Go
Something else to consider with your tax setup is that you should be paying your taxes as you go. This includes taxes on any capital expenditures you’re making, as well as employee salaries that you pay out.
Hire a CPA
Many small businesses think that they have to go through the tax season alone because they don’t have the funds to hire a full-time accountant. That simply isn’t the case.
Fortunately, there are many different freelance accountants and bookkeepers that will help you to go through tax season without having to be kept on retainer for the rest of the year. You’ll simply supply financial documentation, explain your tax goals, and they’ll handle the rest of the business taxes process for you. You can even file married filing separately with the help of an accountant.
They will create W2 forms, identify deductions, and the like.
Know Your Deductions
Last but certainly not least, something that you should know about taxes is deductions. Knowing about whether or not something is tax-deductible will ensure that you reduce your tax liability as much as possible.
Advertising and promotions, business meals, business travel, legal fees, and capital investments are all eligible expenses. By applying them against your revenue, you can significantly reduce tax liability and put a lot of those dollars back in your pocket.
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Save Some Money This Tax Season
There you have it. Equipped with this guide to the small business tax season, you should now be far better prepared to reduce your tax liability and keep more of your hard-earned money.
For more business advice, be sure to take some time to check out the rest of the articles available to read on the website before you leave!
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