The economic climate is still reeling from the COVID-19 pandemic. Some 12% of small business owners say financial stability is the most important challenge for them, beaten only by loss profits and attracting new customers.
No surprise then that taxes—a bill that arrives at the end of each financial year—is the second-most important problem for small businesses in the US.
Managing your taxes for your business doesn’t have to be a headache. This guide shares how taxes impact your business, with 15 bonus tips on how to make tax season more stress-free.
Note: This guide is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant.
How taxes impact your business
Every business owner in the US needs to pay taxes. While the exact amount you’ll pay varies by state and business structure, taxes are one of the biggest costs associated with running a business. The average business pays a 19.8% tax rate on their income.
Along with being one of the largest business expenses, taxes are one of the most important bills. Filing taxes late, inaccurately, or abandon them altogether face fines—or in extreme cases, criminal prosecution.
The good news? Business taxes aren’t as complex as you might think. A certified public accountant (CPA) will help you legally reduce your tax liability so you’re not left with a huge bill to pay at year end.
15 small business tax tips
The last thing you want to feel is stressed when tax time rolls around. Here are 15 tax saving tips to help prepare and manage your small business’ accounts throughout the year:
- Know your financial jargon
- Separate business and personal finances
- Keep accurate records
- Use accounting software
- Pay estimated quarterly taxes
- Set aside cash for payroll taxes
- Track inventory accurately
- Know what’s tax deductible
- Contribute to your retirement account
- Make a charitable donation
- Use section 179
- Use bonus depreciation
- Apply for the qualified business income reduction
- Prepare for tax season in advance
- Hire an accountant
Of course, none of this advice can substitute for a professional tax planner. Not only will they be able to implement each and every one of these strategies for you, but they will actually generate savings that will pay back their services…and much more.
|If you’re curious to know how much you’re overpaying on taxes, then call our offices today at (972)-446-1040 or (817)-498-1040|
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