We’re just a few short weeks away from one of the biggest (if not dreaded) days for small business owners: April 15, Tax Day. Today Nellie Akalp, founder of CorpNet shares her best tips for making sure you’re prepared.
If you’re not an early filer (and how many of us are, especially when we have to pay taxes?) the sooner you prep yourself for filing your taxes in April, the easier it will be.
Gather Your Paperwork
Consider keeping a file folder on your desk and squirreling away all the 1099 forms, profit and loss statements, and other tax-related documents you’ll need to file in one easy-to-find place. That way, you’re not scrambling to download reports and find those random bits of paper later.
Think Out Your Deductions
If you spent money this year on office supplies, rental space for your office, contractors, software, marketing, et cetera, be sure you’ve recorded all of these costs in your accounting software so that your profit and loss statement will come out easy to interpret.
And if you work from home, make sure you’re getting all the deductions you qualify for, including your office space, supplies, and charitable donations.
Consider Hiring a Professional
While tax software like Quickbooks and Freshbooks can help you file more easily, sometimes it’s beneficial to have the assistance of a tax professional or accountant. They will be more on top of tax law and may be able to help you maximize your deductions so you pay less in taxes than you would have if you had filed on your own.
Once you’ve filed your taxes for the year, you can breathe a sigh of relief. But wait: there are things you can do now to make next year even easier.
Change Your Business Structure
Being a sole proprietor isn’t always the most tax-efficient business structure for a small business, so start thinking about making a change to incorporate your business or file as an LLC. You have until March 15, 2016 to incorporate if you want to qualify to file your 2015 taxes as an S Corp, so while that’s plenty of time, there’s no benefit to putting it off.
Think About Taxes Year ‘Round
For many entrepreneurs, tax time sneaks up on them, and they find themselves without the money to pay the tax bill when it comes due. Set aside money throughout the year so that you’ve got the cushion in your bank account to pay it so that you don’t incur a late penalty fee in April. Let’s get started on 2016!
What tax tips have you learned? Tell us in the comments below!
Latest posts by Nellie Akalp (see all)
- Are You Ready for Tax Time? Here’s How to Be! - March 29, 2015
- Mastering Small Business - February 17, 2015
- Why You Should Incorporate (and How to Make it Happen) - February 3, 2015