Small business owners in Texas Hill Country do have a lot of jobs on their hands especially in the area of accounting since most of them do not have the luxury to hire an in-house accountant to help out in this regard. In fact, recent publications claim about 46% of small business owners do not work with an accountant, whereas about 40% of them spend huge time, and upwards of 90 hours, preparing and processing for their federal taxes. It, therefore, becomes important for small businesses in Texas Hill Country to make adequate preparations as well as put simple, manageable strategies in place which will help them be ready for the next tax season.
With this in mind, below are a few things to do;
HAVE AN ACCOUNTING SYSTEM PUT IN PLACE
Your business requires an excellent book-keeping program that is workable for your business. With this, your records would be monitored and updated regularly.
DOCUMENT YOUR BUSINESS INCOME AND EXPENSES STATUS
This will help your business have an organized, quick look check or track of your expenses per week, month or yearly. It will help you during auditing. Some of the items that fall under income include gross receipts, sales records, returns, and allowances, checking and savings account forms (form-1099-INT) and others. The expenditure list that should be properly documented includes employee wages, insurance premiums, office rent or mortgage of your home, payments to contractors (form 1099-MISC or 1096), advertising, transportation and travel, communication services, office supplies, and equipment, etc.
ESTIMATE YOUR TAX ON A QUARTERLY BASIS
This is one aspect that every small business owner must be serious with. Monitor your business profits, gains, and even losses, and use the numbers you’ve to forecast your tax every quarter. Hence, when the tax season comes, there will be no surprises thrown to you.
COLLABORATE WITH INDEPENDENT CONTRACTORS
If your business works with independent contractors, then you’ll need to send all appropriate forms to get ready on time. Forms like 940 and 941 forms and W-2 forms should be appropriately filled and filed. Other forms you might need to get ready include form 1099 and 1096.
Study the tax rules and regulations carefully and know possible deductions and exemptions your business can enjoy to minimize your tax burden. Search for possible tax breaks and use them to your favor. Deductions like employee reimbursement, other startup costs, and insurance are available for business owners. Use only the one available for your business to avoid an unnecessary audit of your business.
MAKE SURE YOUR BANK STATEMENTS ARE READY
There may be need to check your business balance sheets before preparing your tax returns, hence the need to get your bank statements ready before the beginning of next year’s tax season.
PROFESSIONAL ADVICE FROM AN ACCOUNTANT IS IMPORTANT
This is very important when you’re even starting your small business. You may not necessarily hire one, but you can consult an accountant especially when your tax book is in shambles. It is at this meeting you can ask questions and learn, thereby preparing your business ahead of the coming tax season.
Knowing what to expect and taking time to do them before time will save your Texas Hill Country business a lot of credible business hours pursuing tax matters. At Quick Draw Payroll, we stay on top of ever-changing tax laws so you can run your business. Our team of Tax Advisors will put your mind at ease when it comes to tax planning and preparation. We have you covered.