Tax season is here for most countries, and it’s not something that’s the most exciting; it needs to get done. If you’re a small business owner, getting your books in order before filing your taxes is crucial. Not only will it make your filing season a lot less stressful, but it can also future-proof your business.
All businesses need to be tax efficient, yet it feels a bit like a field of landmines if you get it wrong. This is especially apparent if this is your first time doing taxes for your business. So if you want to know how to prepare for this so you won’t have to face an audit, here is everything you need to know!
Gather Your Records
Before you can begin filing your business taxes, you need to gather all of the records you have. This includes receipts, invoices, and other financial documents that will be used on your tax return. Start a filing system that organizes your records by year and category, so you have easy access to them when it’s time to file. This will help you keep track of deductions and credits that may be available for your business.
Getting your taxes in order before the deadline will also help you avoid a last-minute scramble to get them completed. Moreover, it will save you money on your preparation fees by helping the preparer work more efficiently. You need to get everything that seems relevant, as this is going to help your accountant and bookkeeper.
Set a Scheduled Meeting with Your Accountant
Many small business owners find that tax season is a time of year that’s both stressful and overwhelming. It’s not only about getting your taxes done on time but also involves a lot of pressure to file the right forms and comply with changing tax laws. This is where your accountant comes in handy.
They’ll be able to help you get everything ready so that you can avoid any unnecessary stress or headaches. While you could do your own accountant work, as many business owners have to do this in the beginning, it’s not exactly recommended. Instead, it’s better to hire a professional.
Navigating taxes, financial records, or even finding loopholes that accountants know all about is challenging. So instead, you’ll have better luck meeting with an accountant. It’s important to set a scheduled meeting with your accountant before the start of tax season so that you can go over everything that needs to be done. By making an early appointment, you’ll be able to save your accountant some time, and you can be sure that they will be able to give you the best advice possible for your business.
Create a Plan for Filing Your Returns
It’s all going to depend on the country you’re living in. For most countries, including the UK, you can pay taxes quarterly, something that’s strongly recommended in the first place. Having this plan for filing your return is going to drastically help in the long run, as it keeps you prepared (regardless of how busy your schedule is), and it helps you know that you may need to gather all your financial records in advance.
Make a List of Deductions and Credits
As a small business owner, you can deduct a wide range of expenses for running your business. Reviewing these deductions to ensure you are taking them and claiming them correctly is essential. In addition to deductions, you might qualify for tax credits that reduce your final tax bill.
You can even look into R&D Tax Credits, as this could help your business a lot too. These credit options can be more lucrative than a tax deduction for certain types of people and businesses. Usually, your accountant will ask about this or will have a record of it; all of this helps in the long run.
