Doing your taxes as a small business owner can be complicated. There are lots of forms to be filled out and regulations are constantly changing. Thankfully, there are still steps you can take in advance to make tax season easier for yourself.
Know your deadlines
The simplest way to make tax season easier for yourself is to plan ahead. When creating a calendar for your business, make sure to include important dates such as your tax filing deadlines. For 2024, small business filing deadlines are:
- March 15, 2024: Deadline for any corporation set up as a partnership, S corporation, or multi-member LLC.
- April 15, 2024: Deadline for individual filers, sole proprietors (Schedule C), C corporations, single-member LLCs, and LLCs taxed as a corporation.
Knowing these dates ahead of time so that you can plan accordingly and ensure that you’re prepared when these dates arrive.
Keep your business finances separate from personal finances
Having a dedicated business checking account for your business finances is a great way to create an easier tax season for yourself. If you’re running your business through your personal bank account, you create an overlapping of your personal and business finances, which can make your business calculations even more difficult. Having a seperate account for your small business funds can help you to stay more organized and more secure in your tax calculations.
Utilize sub-accounts
To maximize your organization and better prepare yourself to file your tax returns, you should utilize your business checking account’s sub-accounts feature. When you create sub-accounts, you can separate your deposits into different accounts that sit under your main account. Sub-accounts are commonly used to put money aside for large expenses or emergency funds, but they can also be used to put aside money for your taxes, which allows you to feel more secure and prepared once tax season arrives.
Stay on top of your bookkeeping
Bookkeeping is an essential aspect of running a small business, particularly during tax season. By maintaining adequate records, you can better ensure accuracy in your tax return and reduce your risk of being audited. It’s vital that your bookkeeping is being done sufficiently, so check out our small business bookkeeping guide if you find yourself lost in the process.
It’s also possible to automate your bookkeeping, thanks to accounting software. By using software to do your bookkeeping for you, you can free up time to focus on other aspects of your business, such as your tax filings. With Innovator Business Checking, you can easily connect your account information to Quickbooks, a popular accounting software for small businesses, and instantly start enjoying the benefits of automated bookkeeping.
Hire an accountant
If you find yourself getting lost in your finances, the best thing you can do is hire an accountant. A good accountant will work with you throughout the year to track your profits and make sure you have good cash flow. They can even offer advice on how to grow your business. When you use a professional to manage your finances, you can feel more confident that they’re being handled properly, which makes tax filing less stressful.
When deciding to work with an accountant, make sure you know exactly what functions you need them to assist with and how often you’ll require their services. These factors can help you decide whether to hire an accountant directly onto your team as a dedicated employee or outsource your accounting to an independent accountant or an accounting firm. Regardless of where you source your accountant, make sure you’re taking the time to ensure that they’re right for your specific business.
By Michaela Lenahan in Small Business
