Well, Tax Day has come and gone once again. Most of us prefer to brush it under the rug and not think about it for another 10 months or so. Resist the urge. Instead, be proactive about these areas of your business that you can work on so that, come next year, you’re well-prepared for tax time!
Get Your Business Structure Right
If you are still a sole proprietor, it’s time to seriously consider changing that. You may actually pay less in taxes if you file as an S Corp, so it’s worth looking into. Plus, every year that goes by with you not incorporated or acting as an LLC puts your personal assets more at risk.
Assess Your Accounting System
If you’re already using accounting software, consider whether it prepared you for filing taxes this year or not. Maybe you had too many categories for your expenses. If so, set time aside to consolidate them into categories that match what the IRS uses. That will make it easier when it’s time to file next year.
If your software isn’t doing everything you’d like it to, look for other products. These days, your accounting software can even file and pay quarterly payroll taxes, process payroll checks, and provide useful reports.
Tweak Your Budget
If you didn’t have many businesses expenses on your 2014 taxes, start budgeting for what will really help your business grow. Maybe it’s time for new computers, or that marketing software you’ve been considering. Remember: every expense should be an investment into making your company more productive and successful.
Organize Your Tax Documents
Don’t wait until next March to start digging through your receipts and invoices. Designate a folder (or entire file cabinet if you need it) for all the documents you need for your taxes. That way, they’re all in one easy-to-find place and you won’t waste time next spring looking for them.
Consider an Accountant
If you’ve been DIYing your accounting and taxes, think about whether you’re ready for the next step: a professional accountant or tax preparer. Hiring an accountant for a few hours a month can be surprisingly affordable, and can free you up to work on other aspects of your business. Plus, someone who’s trained in filing small business taxes may be able to help you better strategize for what to spend money on and how to cut down on your taxable income.
We all hate tax time, to be sure. But with a little pre-planning, next year’s taxes can be a breeze. And with the right tools, you can make sure you never miss a tax deadline.