Starting and running your own business comes with many challenges and tasks to keep up with. With everything to keep track of, some important responsibilities can easily fall to the back burner. A task that is crucial to prioritize is accounting for your business. Here are some tips to keep on top of your small business taxes.
One of the best tips for small business taxes, if you can afford it, is to not bother doing them yourself. Finding the right accountant for your small business can save you time, money, and the headache of trying to figure out taxes on top of all of your other priorities.
Did you know that there are multiple different kinds of businesses and that you need to know what kind of business you have for your taxes? Your business can be a C Corporation, S Corporation, Limited Liability Partnership, Limited Liability Company, Single Member LLC or Sole Proprietor. All of these different identifiers result in a different effect on your taxes. Determining the right classification for your business can be challenging. Contact an Alloy Silverstein advisor to help determine which one is right for you.
Your business’s taxes come from the difference between your revenue and deductions, your taxable income. Keeping track of your expenses for your business can help maximize your deductions, therefore reducing your taxable income. While not everything you buy will be considered a business expense, more will qualify than you would think. For example, fees spent on travel for business events can count as a business expense. If you’re not sure if an expense will count as a business deduction, save your receipt and ask an Alloy Silverstein advisor.
When tax season comes around, you will be asked to pull out your receipts and business records from throughout the year. The last thing that you will need amongst a busy business and crazy tax season is panic because you cannot find the specific paperwork you need. Maintaining organized and well-kept records throughout the year will save you time and give you piece of mind when tax season rolls around. Plus, you will keep your accountant happy.
There are many reasons why your small business may be audited by the IRS. For example, audits can be triggered by claims of personal vehicles being used for your small business’s needs. The commingling of business and personal finances or expenses can cause the IRS to start looking into your personal accounts. Keeping your business accounts separate from your personal accounts is crucial for avoiding a complicated tax season.
These tips just touch the surface of the importance and ways that you can prioritize your small business’s taxes. If you have any further questions or are looking for more assistance with your business’s accounting, contact an Alloy Silverstein advisor today!
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