The upcoming tax season may seem overwhelming, but following just a few simple steps throughout the year can make this chore practically painless! Here are the five most important steps to a stress-free tax year:
1. Hire a Tax Professional
The business tax code is complicated — especially the new Texas Sales Tax laws. If you want to maximize your deductions and avoid overpaying the IRS, hiring a tax professional is the best strategy.
2. Save All Documents
This should go without saying, but we’re going to mention it anyway. Keep thorough, accurate records of all incoming and outgoing transactions. When it comes time to complete your business taxes, these organized records will streamline the process and ensure nothing gets missed.
3. Use a Business Card
Opening (and consistently using) a business checking or credit account helps keep your expenses organized when it comes time for calculating deductions.
Remember, if you want this method to actually be effective, you’ll need to keep all business expenses on this account — don’t use it for personal expenses!
4. Know Your Tax Due Dates
To properly prepare for your business taxes, you need to actually know when these due dates fall on the calendar! While everyone knows the due date for personal income tax — April 15th — as a business owner there are many more dates to remember.
Quarterly tax estimates are due in April, June, September, and January. The exact day of the month depends on the tax year.
Depending on your business, you might also need to submit a 1099, 1009, or S Corporation tax. You can find these important dates on the IRS website.
5. Take Advantage of Available Technology
Gone are the days of needing to keep all of your business finances on paper. While some business owners still prefer this method of accounting, there are plenty of computer programs and mobile apps that can help keep your business finances organized.