Welcome back to the Scale Your Small Business Podcast with your host, Jillian Flodstrom! In this episode, we’re running through some tips that will help you survive and thrive during tax season. Operating a business is hard enough, let’s make sure you’re prepared for taxes.
Firstly, hiring a CPA is crucial. They are skilled in this exact sort of thing and can help you sort out liabilities and write-offs you may be missing. They can work with you throughout the year, not just at this specific time of year. Remember, extensions cost you money, so the more prepared you are, the better. Make sure that you claim all the income that has come into your business. Keep in mind, if you didn’t receive a 1099 form from a client, that does not absolve you from cleaning on your tax return.
One of the biggest reasons that small business owners hesitate in filing their taxes or wanting to file an extension is because they’re not keeping adequate records throughout the year. Make sure that you’re the client that is keeping things organized. create a filing system with each month. So that way, when you receive those bank statements, you can just instantly file them in each month. Additionally, keep everything in an envelope that is marked with each corresponding month. When you’re more organized, that makes the process that much more streamlined.
Keep your business separate from your personal funds. Whether it’s credit cards, bank statements, whatever it is, it should be kept separate. The easiest way to do that is in separate bank accounts, you have a receivable, a payable, and a tax account.
Make sure that you’ve classified your business correctly. If you’re filing your taxes on your own, and haven’t thought about what type of business you should be in, you could be leaving a ton of money on the table.
If you’ve outsourced that to a company, make sure that you are double-checking them. Just because they’re a reputable payroll company doesn’t mean that you shouldn’t be double-checking the numbers, making sure that everyone is getting paid their fair share, as well as the taxes being taken out.
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