As a business owner or manager, your focus should be on operations and value offerings as opposed to the bureaucracy of taxes. Let our small business tax specialist handle your tax challenges, and you’ll be liberated to perfect your value offering, connect with new customers, and maximize operational efficiency.
The best approach for full tax compliance is to work with an accountant throughout the year instead of waiting until tax season looms. Below, we provide a quick look at additional best practices for small business owners and managers in the context of tax preparation and payment.
1. Keep Meticulous Records for Tax Planning
The quality, accuracy, and orderliness of your records matter. Assume your business will eventually be audited so you better keep accurate records. This way, you’ll file taxes in full confidence, knowing the entirety of the record is accurate. Accurate recordkeeping also ensures you maximize deductions while simultaneously minimizing the chances of an audit.
Sensible Services ABC is here to help you identify the optimal accounting software for your small business’s tax needs.
2. Carefully Select a Small Business Accountant
The best accountants do more than merely generate financial statements and process taxes. Truly elite number-crunchers keep a line of communication open to track client income as well as spending, ultimately preventing cash flow issues. Your accountant should also have the bandwidth necessary to monitor profit, both net and gross, ultimately providing an accurate look at your small business’s financial health at all times.
3. Distinguish Business Expenses From Personal Expenses
The last thing you need is for the IRS to audit your small business and uncover the mixing of business and personal expenses. Even if you report your small business’s expenses in the proper manner, there is the potential for the IRS to analyze personal accounts due to the commingling of funds.
This is precisely why it is in every small business owner and manager’s interest to establish a distinct bank account along with a completely separate credit card for the enterprise. Strictly run business-related expenses through those dedicated cards and accounts.
4. Claim Income Reported to IRS
The IRS is provided with a 1099-MISC form copy to match the business income reported with that received. It is in your interest to claim the entirety of income reported to the IRS.
Reported income must match the income amount reported on the 1099. If there is a mismatch, the IRS might flag your business for review. Keep in mind some clients won’t send 1099, yet your business is still legally required to report the income.
5. Recognize Net and Gross Income are Not the Same
Plenty of small business owners in Hammond, LA and beyond lose sight of the fact that net income is different from gross income. Remember that a product or service that costs more to produce or provide than it generates in sales is a net loss, regardless of how many units are sold. Accurately tabulate gross and net profit; you’ll have the information necessary to catalyze ongoing growth.
6. Mind the Subtleties of Payroll for Tax Planning
Payroll matters in the context of taxation. Every business owner and manager in Hammond, LA and beyond should know that the IRS checks payroll tax payments quarterly.
Instead of attempting to do it yourself (DIY), opt for the assistance of a professional payroll specialist. Choose a reputable payroll provider and provide that specialist with all relevant employee-related information. You’ll sleep soundly knowing payroll taxes are properly remitted.
Schedule a Consultation With Sensible Services ABC
Are you a small business owner or manager? Sensible Services ABC is here to help with your taxes. Reach out to us today by phone at (985) 222-2088. We serve business owners and managers not only in Hammond, LA but also across the nation.
