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Tips for Managing Your Business Taxes

Feb 24, 2021 | 0 comments

Some of the easiest ways to get into hot water:

If you forget one single step during your tax-paying year your, filing could be a bit of a nightmare. Keeping track of your incoming payments, your outgoing payments to contractors, etc. can be daunting, but they are crucial to ensuring you are safe from IRS penalties.

  • Not filing personal or business returns on time or not filing at all.
  • Leaving out required forms – 1099-MISC 1099-G or 1099-R for example.
  • Filing 1099s when you should be filing W-2s because the person is an employee under IRS rules. For more guidance on this topic the IRS has a pretty straight forward explanation here.
  • Not filing payroll returns, not paying the tax, or not paying timely! The government takes BOTH the filing of the payroll forms and remitting of required payroll taxes very seriously! Payroll tax problems are a leading cause of issues with the IRS.
  • If you do pay contractors you need to be filing 1099s with the IRS by Feb 1 and filing them them with correct information. This could lead to Civil Penalties and interest until your resolve the issues. So make sure that you obtain W-9s from every contractor and use the information they provide to file those 1099s!

Tips to Stay Ahead of any Tax Problems

  • Get organized!
  • Get the right accounting software.
  • Know your limits!  If you think “I can do my bookkeeping myself” but you know in your heart that you won’t or you won’t keep it up to date, hire an experienced, trustworthy bookkeeper who already handles similar businesses to yours. 
  • Begin making estimated quarterly tax payments to avoid penalties.
  • Start a savings account specifically for taxes.
  • Digitize receipts. Some apps import them directly to your software.
  • Keep detailed notes. Log all travel & car expenses.  Use technology.
  • Utilize electronic statements. Download your transactions and reconcile them regularly. This is a great way to consolidate your process, eliminate paper and keep finances — and tax prep — up to date.

Who can help?

Tax time may not be the right time to do it yourself if you haven’t kept your books organized.

Many small businesses are equipped to file their own taxes. However, if you find yourself confused and unsure, there are some things to consider when hiring a professional. You want to make sure you hire someone who specializes in tax preparation. A financial planner or your bookkeeper may not be equipped to handle the ins and outs of business taxation. Look for a certified public accountant (CPA) or a tax specialist that is registered with the IRS.

Also, tax preparation fees are tax-deductible! Win-win!

If your taxes owed are starting to pile up and you’re now facing penalties and interest, you may want to look into tax debt relief. That’s what we specialize in.  We are here to help.

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