Tax season can be brutal, especially if you own a business and have to do your own taxes and your business’ taxes. Whether you do your business’ taxes by yourself or with help from a professional, it’s wise to remember these tips from straight from experienced accountants.
Make Sure that You Understand your Requirements and Deductions
Plenty of businesses don’t really understand the specific tax return reporting requirements. Working with a professional prior to the year’s end will help you organize things better, reduce your costs, and perhaps benefit from deductions available to you. For instance, many businesses don’t know that they’re only allowed a 50% deduction for entertainment and meals, CPAs in Utah note. But, she adds that they could actually get a 100% deduction on those in particular circumstances such as holiday parties or if they provide meals for their employees during work hours.
Save for Costs Related to Tax Liabilities
Some businesses pay hefty penalties and fines just because they failed to save up some cash for covering tax liabilities. The main issue here is that taxes must be paid off periodically, and in between these periods, businesses could use up all their cash for operations. Financial experts recommend that you open up a separate account that you can use solely for saving money that will go towards paying off your tax liabilities.
Think of How your Future Business Plans Could Impact your Numbers Next Year
Perhaps you’re expanding next year or will be seeking additional funds. Do you want to use the accrual or cash basis as your reporting method? This is crucial since it could affect your losses and profits. Additionally, your profit will come into play when applying for a loan. Basically, there are ways around these things so you should always keep your accountant in the loop, or consult one if you don’t already have one.
Although plenty of businesses find success in performing DIY solutions to their problems, taxes are on an entirely different level that’s usually best done with help from a professional. Just keep these expert tips in mind so that your taxes will be done accurately and you’ll have plenty of time to work on your business.