Small business owners often face a steep learning curve. At the start, many have to work as their own social media managers, IT specialists, sales reps, and customer service departments — all on top of their core duties. One of the more complex areas to tackle are taxes and finances. If you are not a financial expert, it can be challenging to learn how to best keep records for your business, and how to get all applicable tax breaks.
If you are a new small business owner who is filing business taxes for the first time, follow these five easy-to-implement strategies from Perpetual Resources.
Consider professional accounting services
These days, your schedule is likely brimming with to-dos. Time management strategies have never been more important. When you try to take on all the duties involved with managing your business’s finances, you often add on more hours than you can reasonably handle.
To keep these tasks off of your plate, consider professional accounting services. Not only will utilizing these services make your life easier, but they will also make tax time much less stressful. Having someone who is experienced in keeping financial records, handling payroll, and filing taxes will save you hours of hassle and frustration. It will also ensure that your taxes are filed accurately, which can ultimately save you money.
Apply for an EIN
No matter your business structure, having an EIN (also known as a Tax ID Number) can afford you many advantages. Signing up for one with the IRS is free and easy.
What is my EIN number? Put simply, it is the primary way that various institutions identify your business. It is how the IRS tracks payroll taxes, and is also needed when opening a business bank account or hiring employees. One of the top advantages of having an EIN is the easier time you’ll have in filing your state and federal taxes, whether annually or quarterly.
Pay your taxes on time
While you certainly have options if you are unable to pay on time, don’t wait to settle up your tax bill. In your first year as a business owner, it is challenging to know exactly what you’ll owe. You may also incur last-minute expenses that deplete your savings, making it challenging (if not impossible) to pay your taxes in one lump sum.
To avoid last-minute stress (and to save on fees), opt to pay your taxes quarterly. Set aside around 20 percent of everything your business makes, and pay it toward your annual taxes. If tax season is rapidly approaching, and you’ve not used this strategy, the IRS does offer payment plans to make larger payments far more manageable.
Manage your stress
Tax time can take its toll on even the most resilient business owners. Work to manage the stress that can arise during this time of year by practicing regular self-care. Check in with yourself throughout the day, and recognize when you are becoming overwhelmed. During times of high stress, plan routine breaks to meditate and breathe deeply.
Get a head start on next year’s taxes
Want to make the next tax season even easier? Get a head start this year. Be proactive in keeping all needed records, learn from any mistakes that you may have made this year, and pay money toward your taxes throughout the year. This will help ensure that there are no unpleasant surprises when you go to file.
Even if you’ve been dreading filing your business taxes, you don’t have to stress. By implementing the above strategies, you can seamlessly file your taxes, and make next year’s tax season a breeze.