If it seems like you’re spending more and more time each year thinking about and filing taxes, you’re not alone. In fact, the majority of small business owners spend more than 41 hours preparing taxes every year. That’s almost two full days! As a small business owner, you might be even more stressed to know that tax season is upon us. Not to scare you, but you have just over a month to get your taxes filed. Don’t let tax season leave you filled with anxiety and sleepless nights. Instead, keep your tax season stress free with these simple steps:
1. Maintain bank statements & keep them in order.
It’s okay if you haven’t done the best with organizing your financial paperwork this year, but now is the time to pull out that file folder of bank statements and start organizing. We suggest you put all of your statements in date order and double-check to make sure you’re not missing any. Keep this folder in a drawer that’s labeled and easily accessible. If you do the majority of your banking online and do not have paper statements, review your online statements closely and make sure you have them available for your CPA. And a word to the wise: if you haven’t done so already for 2016, make a file for this year’s bank statements and take a moment to organize those right now. Your future self will thank you.
2. Know your tax responsibilities for 2015.
One of the most important things to know when filing your taxes is what your responsibilities actually are. Make sure you know which bracket you fall into, your filing requirements and which forms you will need. Double check that you have sent and received the appropriate forms for your employees and contractors, too.
3. Organize receipts and reimbursements.
Much like organizing your bank statements, it’s time to organize your shoebox of receipts. If you’ve made the switch to a cloud-based receipt system like Wave Receipts, take a moment to ensure all of your receipts from 2015 have been entered.
4. Calculate business deductions.
Hopefully, you’ve learned by now that there are a lot of possible small business tax deductions. Make sure that you’ve crossed your t’s and dotted your i’s to check for the deductions that apply to you and your business. Ensure that you’ve saved any receipts that you need in case of needed clarification. In 2014, more than 106,000 of businesses making $25,000 or less were audited. Even if your business is tiny, it’s better to be safe than sorry.
5. Hire CPA or bookkeeper.
Rest easy this tax season and hire a CPA or bookkeeper. We get it: running a small business is hard and getting your taxes done can be a headache. More than 40% of small business owners say that bookkeeping and taxes are the worst part of small business ownership. Evade restlessness and hire an accounting expert. Think of your CPA or bookkeeper as a sage in the accounting world. They understand the ins and outs of filing, what’s legal (and what’s illegal), regulations you need to know, deductions you might be missing and more. If you’ve completed your own taxes, if nothing else, hire someone to take a look at your paperwork before you finish filing. A second set of eyes is always a good idea.