Why You Want to Owe Taxes
Blog Post (with free checklist)
Whether you are running an existing business or writing a business plan for a new business, you should plan to be proud of your profits – even during tax season. Everyone dreads tax season, from individuals to small business owners to large corporations. And the complexities involved in trying to determine what qualifies as an expense, or how to handle cash payments, tempts many business owners to make faulty decisions without considering the ramifications.
But owing taxes is a good thing. It’s a manifestation of a healthy business operating successfully. It means things are going right, which will only help you down the road. So take the stress out of filing taxes with these tax tips for entrepreneurs:
While Writing a Business Plan for a New Business – Hire a Tax Pro
Entrepreneurs can do it all – almost. When it comes to filing taxes, hire a professional. The cost is worth it. An accountant can save you money by ensuring you’re not overpaying. And unlike Google, an accountant can customize answers to questions about your business.
From disorganization and lost time to interest fees, procrastination hurts. The last thing your business needs is an eleventh-hour scramble for numbers. Instead, keep accurate records as they happen and get the task done when it’s time.
To correctly deduct your expenses, you need to know what they actually were. Keep notes of your business activities as you go throughout the year. It can be a paper journal, or a spreadsheet in Google Docs. Just keep track of it. A lot can happen in a year. Not very organized? Programs like Mint and QuickBooks can work wonders for creative minds.
Keep a Paper Trail
Besides the legal ramifications, accurately reporting your cash earnings creates an automatic paper trail that will prove invaluable down the road. Whether you wind up selling your business, applying for a bank loan, or reaching out to investors, your company will only look as good as you report it on paper. And if you’re reporting yearly losses, you’re setting yourself up to miss out on potential investments or a buyout down the road.
Play by the Rules
Remember, play by the rules. Never try to stretch, bend, or circumnavigate the rules. It isn’t worth it, and it always costs you in the long run.
When it comes to capturing all of your legitimate expenses, make sure you don’t overlook the biggest areas. Working with a tax professional will help you claim everything you should, but in the meantime, here’s a free checklist to consider to help you get started.