The world of business ownership has gotten a little crazy lately, and we understand that it can be easy to take your eye off the ball as a business owner. This is why it is so important to try to remain focused on business finances and what is impacting them. Tax is not something that just goes away, and you need to make sure it’s a key part of the financial considerations you make for your business.
But you don’t need to panic, because that’s what we are here to help you with. It is vital to do as much as you can to plan and prepare for your tax responsibilities this year. A recent survey by the National Federation of Independent Business found that 14% of small business owners listed taxes as the biggest problem they faced. Here are some of the tips that we suggest you use to try to avoid tax surprises this year.
Bookkeeping is essential
Okay, sure, we’re going to say accounting is absolutely essential to business aren’t we? But, that is true! And you need to make sure you use professional bookkeeping services in order to ensure your company’s finances are all in order. There are so many financial pitfalls that can take companies by surprise, and you might not be aware of a lot of these issues! So make sure you prioritize professional accounting services this year!
Run tax estimates monthly
In our experience, that is one of the most neglected aspects by most small business owners! When hiring a professional to do your monthly bookkeeping, make sure you ask them to run a tax estimate for you monthly so you can budget your finances throughout the year. Having a separate bank account to save for tax payments is another great tool you can use, while making some interest income on your tax savings.
Make payments throughout the year
Another thing we would recommend in order to help you avoid getting a shocking and unexpected tax bill would be to make payments throughout the year. Look, we realize that a lot of people prefer to just pay it all in one lump sum, and that makes sense. But, with the current economic climate, it might be a strain to make one large payment, and it could wind up being more than you might imagine. By making regular weekly or monthly payments throughout the year you know you are taking care of your tax and it’s one less thing to worry about.
Filing an extension
It might not be ideal, but you could well be in a position where you find you need a bit more time to file your tax returns. COVID-19 has hit small businesses hard, and a lot of companies have been out of action for months. If you are in a position where you feel as though you need more time, you can file for an extension. Check out the government procedure on this, or speak to us and we can advise you on the best way to proceed.
Making the right choices regarding your business tax implications is so important, and that’s what we are here for. So get in touch with us today to make the most of all our accounting services, and ensure that you have no tax surprises to contend with in 2020!