Small businesses need to pay taxes on their income just like any other person or entity would. However, there are ways that the owners of these small companies can make it easier to ensure that they are staying in compliance with tax laws. With good planning and professional assistance, it can be easier to be proactive about tax issues as opposed to reactive.
1. Keep Organized Financial Records
Paying your taxes is always easier when you know exactly how much the company owes. Ideally, you will have an organized set of books that have a current total of accounts receivable, accounts payable and any payments already obtained in a given year. Furthermore, be sure to keep track of expenses such as supplies, payroll or anything else requiring the business to give money to someone else.
2. Get Help From a Professional
Working with an accountant can be an ideal way to get your taxes filed and sent in on time. If you are too busy with customers or other tasks, your accountant can file tax returns and make payments on your behalf. However, if any mistakes are made by an accounting firm, you are still responsible for those errors. Therefore, be sure that you review the return at some point for accuracy. Even if you review a tax form after it is submitted, you can still amend it and avoid a negative outcome.
3. Plan Ahead for Future Years
If you know that the business is going to hire employees, get copies of necessary tax forms before you need them. If possible, fill out any sections that require only generic information about the employee or about the payment being made. Doing so will enable you to better estimate your tax bill as well as spend less time filing out forms later on. There are additional resources at Thinking Capital, which may help you learn more information.
4. Don’t Be Afraid to Ask Questions
As a business owner, you should never be afraid to ask questions about your tax situation. You can ask questions from a variety of sources including a lawyer, an accountant or a tax official from the appropriate government office. By getting an answer from a quality source, there is no need to guess and potentially make a costly mistake on your return.
Small businesses have less room for error when it comes to making a mistake on a tax return. Therefore, it is important that you spend as much time as necessary completing them accurately and completely. In some cases, taking time to ask questions or research your company’s tax situation could result in finding out about a tax break or credit.