The right steps for tax preparation in 2019 can keep you from pulling your hair out.
What do you know about tax preparation in 2019? If you’re a small business owner, it’s probably somewhere between very little and not enough. And that’s pretty typical. You’re a subject matter expert in your company, your product, your service, your customers, and your employees. You can’t know everything there is to know about taxes as well. But putting your head in the sand won’t make taxes go away. Here are some critical things every small business needs to know about tax prep.
2019 Tax Prep Tip #1: Classify Your Business Correctly from the Start
You do not want to overpay on your taxes. Correctly classifying your business will prevent that. Get professional guidance when starting your business to help you make sure you do it right from the start. You can change your classification down the road, but it gets complicated as your business grows.
2019 Tax Prep Tip #2: Separate Business Expenses from Personal Expenses
This seems to be something that a lot of business owners get wrong. We admit the lines can be a little blurry, but the best way to complicate your tax filing is to combine business and personal expenses throughout the year. Our advice? Just don’t do it. Right out of the gate, get a separate bank account and a separate credit card and never let them cross paths with your personal spending and accounts.
2019 Tax Prep Tip #3: Do Your Bookkeeping Right
Tracking financial data is one of the most important things you do for the success and longevity of your business. Doing it right is critical. Bad bookkeeping can mess up your taxes or flag you for an audit quicker than you can say “I should have hired a professional.” Invest in good accounting software and make sure you record every single cent you spend and every single cent you receive. Skipping out on accurate bookkeeping can not only confuse your financial picture come tax time, but it could also keep you from taking advantage of all of your potential deductions.
2019 Tax Prep Tip #4: Get to Know Due Dates and Tax Forms
Depending on the classification of your business, you might file your taxes once a year on April 15th or quarterly. Knowing what your tax filing due date or dates are will help you avoid penalties for filing late. You should also know the important dates for filing extensions and making payments.
Anyone who’s ever filed taxes, whether personal or business knows that there are a lot of tax forms. So many forms and so many choices! You have to choose the right forms for your business taxes. You can’t correctly file your taxes if you’re using the wrong forms. Know which forms to use for your type of business.
2019 Tax Prep Tip #5: Hire a Professional to Prepare Your Taxes
Hiring specialists will help your business thrive and grow, no matter what expertise you’re looking for and what project you need help with. You wouldn’t try to do engineering work without training and experience in engineering, why would you try to manage your taxes without knowing what you’re doing? Understanding the basics isn’t enough when it comes to getting it right for your company. An accounting firm can help you maneuver through the ins and outs of tax prep and filing. This means you have an expert to handle all of the work leading up to tax time, knowing what forms to use, understanding tax laws and changes to it, and being able to maximize your deductions.
Your small business is more than a hobby, it’s something you’ve invested in, professionally and personally. Don’t skimp when it comes to taking care of that investment. When it comes to tax preparation in 2019, the most important factor is careful preparation. For everything you need to know, click or call 678-990-0924 for a free consultation to learn how professional tax preparation can help your business.