If you run a small business, staying on top of your taxes throughout the course of the year is going to be very important.
The average small business is subjected to a federal tax rate of almost 20%. As a result, you might find yourself in a state of shock come tax time if you don’t keep your small business finances in good order.
Today, we’re going to provide you with seven tax tips that will prove to be very beneficial for your small business. They should help you save money over time when it comes to paying your taxes.
Check out our tax tips below and put them to good use ASAP.
1. Keep Your Personal and Small Business Finances Separated
And it comes back to bite them once tax time rolls around.
If all of your finances are intertwined, it’s going to make it almost impossible for you to sort through them successfully. You’re going to mix them up and struggle to file both your personal income taxes and your business income taxes.
Even if your small business is very small, you should still avoid mixing your business income and expenses with your personal ones.
2. Do Your Best to Keep Accurate Financial Records
In addition to separating your small business finances from your personal finances, you should also make an effort to keep accurate financial records at all times. You don’t ever want to find yourself scrambling at the last minute to make sense of these records.
3. Call on a Tax Consulting Company to Assist You
Filing small business taxes can be a big challenge for those who have to do it, especially when you’re doing it for the first time. You should reach out to one of the tax services in your area to help with taxes owed.
Of all the different tax tips on this list, this one is going to be the most important. You will want to have a reliable tax consulting company in your corner guiding you through the process of filing your business taxes.
4. Make Sure You Claim All Your Small Business Income
The total amount that you owe to Uncle Sam when you pay your business taxes each year will be largely dependent on how much you make. For this reason, you need to keep tabs on your small business income all the time.
You also need to be sure that you claim all your small business income and don’t cut any corners. This way, you won’t have to circle back later to make adjustments to your business taxes if the federal government finds out that you didn’t claim as much income as you should have.
5. Take Advantage of the Tax Write-Offs Available to Small Businesses
Although you will be responsible for paying business taxes based on your income, there are certain tax write-offs that can dramatically reduce your tax-related responsibilities. You should take advantage of each and every one of these write-offs to save money on your taxes.
Everything from your rent and your utilities to your supplies and your payroll can serve as tax write-offs. You should speak with a tax professional about how to write off the things that qualify to be deductions.
6. Consider Making Charitable Organizations on Behalf of Your Small Business
As the owner of a small business, you should try to support as many charitable organizations as you can. This will, first and foremost, show your commitment to your community and help your small business build a better reputation.
Supporting charitable organizations will also work wonders for you when it comes to getting your taxes squared away. You will be able to write off a portion of your charitable contributions on your taxes to reduce your tax payment.
This obviously shouldn’t be the only reason that you donate money to charity on an annual basis. But at the same time, you shouldn’t pass up on the chance to use your company’s charitable donations to bring down your tax bills.
7. Learn From Any Small Business Tax Mistakes You Might Make
If you run a small business for a long enough time, you will eventually find yourself making tax-related mistakes. Even if you have a tax professional on your side, mistakes are going to happen from time to time.
Instead, you should use them as lessons and learn how to avoid these mistakes as you move forward.
There is going to be a silver lining in every single mistake that you make. Try to find it so that you can use your mistakes to make your small business stronger.
These Tax Tips Will Make Paying Your Small Business Taxes Less Stressful
Under normal circumstances, paying your small business taxes is going to feel very stressful. You’ll cringe at the mere thought of sending a big, fat check to Uncle Sam.
But when you utilize the small business tax tips found here, you’ll find that you won’t be as stressed out as you would normally be.