If you own a small business, it can be challenging figuring out your tax obligations, especially during the first year. It’s important you get it right, because no one wants to be stung with a considerable tax bill they weren’t expecting. I personally find a lot of value in outsourcing my accounting each year so I can rest assured that an expert is handling it. In my experience, whatever I’ve spent in accounting, I’ve more than saved in their expert knowledge and the peace of mind that everything’s been done right. If you’re coming into your first tax year, or worried that you’ve not been doing the best job of handling things, keep reading to learn my top 4 accounting and tax tips for small businesses.
1. Unless You’re an Expert, Outsource It
Unless you have considerable experience in taxation, it’s almost always a good idea to outsource this. There are so many taxation loopholes that are important for really making the most of the exemptions and I personally feel it’s better to have someone help you with this, so you can focus your energy in growing your business. Gramtaxaccounting.com, for example, has numerous years experience handling tax filing for businesses of all sizes. They have plenty of knowledge about how best to manage business expenses, any rebates or tax benefits you might be eligible for.
2. Be Careful How You Get Started
I think it’s very important how you get started – will you set up shop as a freelancer, more formally called a sole trader, or perhaps you want to get started with a business or a S-corp or something to have some legal protection and a legal entity. There are many pros and cons to consider, and this is actually the stage where I would start to seek out legal advice as to how best to set yourself up. If you’ve already done something, it still might be worth seeking out legal advice to see if you set things up in a way that will benefit you the most in the long run. Looking to upgrade your car? Why not search for the best ceramic coating near me for a beautiful finish.
3. Get an App
I’m a big believer in using technology wherever I can to help automate things. There are certain apps, like Xero, that help you manage your tax obligations. You can start using it to help automatically label spending as a certain expense, so that you can make your overall tax filing more automatic and easier to keep on top of. One of the things I personally found hardest to keep track of was business’ expenses, and I’ve found that Xero makes it easier than ever before to have a quick system for categorizing things so that my accountant can easily process my expenses.
4. Keep On Top Of It
It’s very easy to fall behind with accounting things, even if you have a dedicated accountant to help you make things easier. I would set aside a day of the week or month where you sit down and go through any transactions and label them correctly. I would also use this time to monitor the business income and overall expenses, to see how you’re sitting for the month. It can be tempting to get behind a little, but it’s one of those things that as you get further behind it can feel completely overwhelming and be very hard to dig yourself out of the hole. Make a regular time each week to work on it, and you’ll be glad you have such a clear system in place. Want to take your health to the next level? Why not consider doing some Green Press juice fasting.
Hopefully these tax and accounting tips help you feel confident handling your next tax season for your business!