Tax time. Yes, it’s “busy season” for us accountants, but it’s also the time of year when people outside the four walls of our office building are laser focused on the importance of tax planning. If tax strategies are top of mind for your small business, read on to find out a few simple ways to take a more proactive approach to Tax Season.
As a CPA with more than 15 years of experience working with business owners in a wide range of industries, I’ve seen the rewards of tax planning done well, and I’ve seen the challenges that can arise when it’s treated as an afterthought. In many cases of the latter scenario, the “afterthought” approach wasn’t taken because that business owner didn’t take tax planning seriously — rather, it’s typically because tax laws and planning strategies can feel incredibly overwhelming for folks who aren’t familiar with them.
After all, tax laws are complex and ever-evolving. But when thinking about all the advice I’ve given throughout the duration of my career to all sorts of businesses, I’d say the following tips are the most universally applicable. Whether you’re considering starting a new business, you’re already running a successful operation, or you’re ready to scale, the tax tips below can help keep your business on track.
1. Keep clean books year-round. This one may seem fairly straightforward, but you’d be surprised how many times I’ve seen small business owners come to the office with a shoebox full of receipts and no other organizational processes or procedures for their financial records. Going through your accounts to reconcile expenses and transactions regularly will not only make tax season easier, but will also give you a clearer picture of how your business is doing throughout the year. Keeping clean books also ensures that potential deductions won’t be missed or forgotten.
If you’re a little behind on your books and struggling to find time to catch up, start small: Carve out 30 minutes to an hour each week to focus on bookkeeping needs. Once you catch up, keep that block of time in your schedule. Staying on top of this task will save loads of frantic administrative time in the long run.