Tens of millions of small businesses operate in the United States. Just about every one of them contributes to the trillions of dollars the IRS collects in taxes every year.
When you’re opening a business’s doors for the first time, taxes aren’t likely to occur to you until April rolls around. When April does come, if you haven’t been planning throughout the year, you’ll be scrambling.
Yes, small business accounting can be a headache. Armed with accounting tips and discipline though, you’ll find that keeping your books in order so you can pay your taxes on-time and save money while doing so gets a lot easier.
If you’re ready to take some of the pressure off of your accounting practices, keep reading to learn 5 key things you can do now that’ll save you time and money.
1. Keep Track of Every Expense
Every time you buy anything that could qualify as a business expense, you need to track it. Even if the expense seems insignificant.
You never know what you can use as a tax write-off so it’s best to have a system in place that captures all of your spending data throughout the year so you can sit down and assess things later.
Every expense you write-off is income you won’t get taxed on so certainly you have an incentive to write-off as much as possible.
2. Get Your Books Updated Every Month
It can be tempting to run your small business like you do your personal life. That usually means ignoring accounting all year and then going crazy the first two weeks of April to get everything in order by the IRS deadline.
Don’t fall into that trap.
An organized business works on tax strategy planning year-round by keeping its books up to date monthly so you can see trends, tax obligations, and more.
Approaching numbers monthly lets you assess expenses with a fresh recollection which can help you better categorize your spending.
3. Pay Your Taxes Quarterly
Most businesses operating in the US are obligated to pay their business taxes quarterly. If they don’t, they’ll incur fees come April for holding onto the outstanding money.
You can learn more about quarterly taxes on the IRS website.
4. Talk to a Professional
We live in an age of DIY. While that’s fine when it comes to painting your house or changing a tire, leaning on online accounting tips so much so that you DIY your business taxes may not be a great move.
Making mistakes on your taxes means asking for an audit from the IRS. That audit will be a headache in itself and may also reveal deeper problems that could get you in trouble legally or financially.
5. Get Automated
Whether you DIY taxes or work with a tax professional, tracking your key accounting data will be worlds easier if you have an automated accounting solution in place.
Tools like QuickBooks and Freshbooks are invaluable to any small business tax strategy. Try either of them out and see what they can do for you!
Simple Accounting Tips Can Reduce Your Tax Obligations
The better organized you get with the help of accounting tips, the more money you’ll be likely to save by writing off expenses and organizing things in a way that lowers your chances of being audited.
If that sounds good to you, start leaning on the information you’ve just learned! We’re confident it’ll improve your relationship with small business taxes.
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