5 Tips to Prepare for Tax Season as a Small Business

How to Prepare for Tax Season as a Small Business
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When it comes to taxes, most business owners get stressed out, and rightfully so. Preparing your taxes is a huge time investment, requiring sorting through tons of paperwork, receipts, and more. When you’re already maxed out with things to do, it’s normal to go into panic mode as the filing deadline approaches. 

If you find yourself fretting about filing your taxes every single year, it’s time to reexamine your plan. With the right plan, you’ll take small steps all year to keep yourself organized, so that you’re way ahead of the curve when it’s time to file. We’ve put together a quick guide to help you put together a plan that will make tax season feel like a breeze.

1. Uplevel your tax code knowledge

We know what you’re thinking- “I just don’t have time to learn tax code!” Many small-business owners aren’t aware of all of the things they can write off. Do a little research and make a list of everything you can (or can’t) write off. NOLO’s “Tax Savvy for Small Business” is a great book to help you get up to speed on tax implications for small business owners

Then keep a log of all of your expenses throughout the year and cross-check it against your write off list. Don’t forget to search for the most commonly missed write offs so you don’t miss anything!

2. Use an app to help you track your profits, expenses, receipts, and mileage

We live in the digital age and there are multiple apps to help you track every aspect of your business. Apps make it easy for you to stay organized on the go; you can enter your expenses and mileage right away! Here are a few handy apps:

3. Keep up with your bookkeeping

We recommend devoting an hour or two every week (or month at least) to your bookkeeping, so that things don’t pile up. However, we know that when you’re running a business it can be tough to carve out that time. If you’re struggling to find the time to do your books on your own, we recommend hiring a professional bookkeeper to help you out. If you don’t have time to vet bookkeepers, you can use a solution like Bench (https://bench.co/), which is a platform that pairs you with a bookkeeping pro.

4. Create a checklist

Using a checklist is a great way to make sure that you don’t forget anything that you’ll need when tax time comes. This detailed checklist (https://www.hrblock.com/tax-offices/tax-prep/tax-prep-checklist-smallbusiness.html) from H&R Block outlines everything that you (or your tax preparer) will need to complete your taxes. We recommend reviewing this at the beginning of the year and referring to it again at least six weeks prior to the filing deadline.

5. Create a team of financial professionals

Having the right accountant, tax preparer, and bookkeeper (see tip #3) on your side makes tax time a lot easier. Even if you don’t have the budget to hire a full team of financial wizards, you can use platforms like Upwork.com or Freelancer.com to find help on a contract basis. 

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