As the end of the year looms ahead, a small business owner’s mind turns to thoughts of tax season. In fact, small business owners should be preparing for tax season all year long. Even if you outsource your tax preparation, the following small business tax tips will spare you from the pain and stress of the ever-looming April 15th deadline.
Be timely when tracking business expenses
There are many apps that can help you track expenses right after they occur – or even simultaneously. When you have to recreate your business travel in Google Maps months after it occurred, it becomes a maddening mess that no one walks away from without bruises. Keep your business expenses on a separate credit card to make tracking expenses easy at the end of the year.
Automate your record-keeping system
Automate your records now – before your business becomes so big that the process of automation feels onerous. There are many great programs that can help keep you organized while staying on top of the changing tax rules. Besides, wouldn’t you rather be spending time on your core business areas rather than preparing taxes?
Donate what you can
As the holidays approach, small business owners should donate as many quality goods and services as they can to qualified charities in exchange for tax deductions. A United States Small Business Administration survey showed that 75% of small businesses donate some portion of their profits to charities, such as Goodwill. Cash, volunteered services, sponsorship of a charity event or the donation of inventory or services all qualify for a deduction. There are limitations, however, so be aware of those and keep good records.
Outsource what you can
Payroll taxes can be a beast. Outsourcing aspects of your business, such as product packaging and shipping, can reduce payroll processing fees and relieve you of the need to stay on top of the complicated payroll tax regulations. Invest in local fulfillments services like Goodwill Industrial Services and you can also avoid costly import taxes and tariffs. Contact us for a free tour of our facilities!
Reference expert resources in the know
Researching expert tax sites such as Turbo Tax can give you great tips for each tax year. Carrying forward your health credit or deducting Section 179 property taxes are easier if you plan for them throughout the year. In addition, staying on top of the numerous changing tax rules will help you keep appropriate records throughout the year, instead of scrambling in March and April.
Remember that the information provided here is general in nature and may not apply to your specific situation. Be sure to consult your tax adviser with questions.