Because it is officially tax week, Mercado Insurance Services would like to present this special edition blog post that is focused on helping small business owners plan for next year’s tax season. As insurance providers, we very much believe in the power of preparedness. We hope you enjoy this special feature and take some time to put a few of these steps into action. No better time like the present to prepare for the future.
Planning Ahead Can Make Tax Season Easy for Small Business Owners
We just wrapped up another tax season and let me tell you, this stuff never gets any easier to understand. It seems the more business you do the more pages come in your tax instruction booklet and the more complicated everything gets. Small business owners have special challenges with deductions and self-employment taxes. Itâ€™s a mess. Tax season is a lot like holiday shopping. Every year we tell ourselves weâ€™re not going to wait until the last minute and what do we do? We procrastinate and then curse the very day we knew was coming for at least the last 364 days. Well not anymore. Next year you are going to be prepared and this article is going to give you the tips you need to get a running start. No more procrastinating. Letâ€™s get to work.
Step 1: Call In The Professionals
Â There are times when itâ€™s great for small business owners to cut corners and there are times when you just have to spend some dough. Having an accountant that specializes in small business taxes do your income taxes is a smart investment. This way your taxes are guaranteed to be filed correctly and you donâ€™t have to stress out about missing something important.
Step 2: Create a System
Â Now, donâ€™t think that just because youâ€™ve hired a CPA to do your taxes for you that you are completely off the hook. Itâ€™s still your responsibility to provide your CPA with all of the necessary documentation. This is where planning ahead benefits you most. Since youâ€™ve just done your taxes, the list of documents you needed to have for this year is still fresh in your mind, and probably laying right there on your desk. Collect all of those documents and put them in one central place. Receipts can be organized according to month all year long for easier figuring in the spring.
Step 3: Go Techno
Â Thankfully, technology has made our lives a lot less complicated in many aspects. I mean we donâ€™t even have to scoop coffee into filters anymore. Nope, just pop in a little brew cup and youâ€™re good to go. The same holds true for your taxes. If your small business is small enough, you may be able to get away with using the latest tax software to do your taxes yourself. Having all of your financial transactions recorded in a program like QuickBooks also helps you keep track of your earnings and expenditures.
Step 4: Know Your Tax Code
Ok, so we donâ€™t expect you to know all of the tax code, but you should be well-versed enough to know about any key changes in the code since the previous year. Keeping up with these changes when they are announced throughout the year will make your life a lot easier. Pay special attention to any changes that directly apply to you as a small business owner.
Step 5: Plan for Retirement Now
Â Donâ€™t wait until youâ€™re 65 to start planning for your retirement. Make sure you are putting enough money each year into your IRA or 401K. You can put up to $200,000 into your retirement plan tax-free per year and know that you will be well taken care of when it comes time to retire.
These strategies will help you prepare early for tax season 2017 and will definitely decrease the stress in your life. Start preparing now; youâ€™ll be happy you did.