Tax season is the least enjoyable times of the year for small business owners. As we calculate how much we owe the IRS and scramble to find new tax deductions, it’s easy to get overwhelmed. Fortunately preparing your taxes does not have to be a daunting and complicated process.
In fact, there are tons of new tax credits and helpful tips that can help you keep more money in your pockets.
The following Tax Survival Guide offers 4 critical tips to help entrepreneurs prepare their tax returns, while holding on to their money and sanity. With just four more weeks to complete your taxes, it’s time to take notes and get going…
Here Are 4 Ways To Survive This Tax Season:
1. Choose Your Accountant Wisely
Finding a great accounting is not always an easy task. You want someone who communicates well, helps you strategize and maximize your business’s finances, is affordable and is willing to adjust to your risk tolerance within reason. Here are six traits to look for when hiring an accountant for your small business.
2. Avoid Paying More Than You Owe
Did you know that many taxpayers lose out and overpay the IRS because their tax preparers made mistakes on their returns? It’s true! Avoid giving away your hard earned money by being aware of costly (and common) errors. Here are five mistakes that leave entrepreneurs paying more than their fair share.
3. Find Out Which Tax Credits Your Small Business Is Eligible For
The Small Business Jobs Act and the Small Business Health Care Tax Credit — are two new pieces of legislation that may benefit your business this tax season. For the Small Business Health Care tax credit, an eligible small business is defined as one that has 25 or fewer full-time employees receiving annual average wages of $55,000 or less.
For purposes of the Small Business Jobs Act, small businesses that qualify can be a partnership or a sole proprietorship and must not have stock that is publicly traded. There are several tax cuts built into these new laws, so see if your small business is eligible.
4. Don’t Raise Red Flags That May Trigger A Tax Audit
Since only about 1% of tax returns are audited, the odds of you getting an audit notice are slim. However, you should avoid raising any red flags that may get your small business unwanted attention from the IRS. To make sure you’re in the clear- report all of your income, provide complete information, and do not claim any unwarranted deductions. Learn more about how to avoid a tax audit.
Use the tips from the Entrepreneur’s Tax Survival Guide above to knock out your taxes. The sooner you prepare your tax returns and get that tax burden out of your head, you can get back to what really matters- running your small business and making more money for the IRS to take next year.