Running a business is hard and complicated. There are so many balls in the air at any given time that you mostly just hope you don’t drop an important one. Taxes are one of the important ones but where do you even begin? My best advice is to hire an accountant you trust. Even if you do your own bookkeeping, taxes change constantly and you don’t have time to keep track of all the rule changes. You might think your taxes are fairly simple, but having them prepared by an expert gives you peace of mind that they’re done right and someone to go back to if you get audited.
The next thing is to stay on top of your bookkeeping. Whether you’re doing it or someone else, setting apart some time each month to make sure the previous month’s data is tracked and accurate will make for a much smoother tax season. Your records will be more accurate (seriously do you remember what that $20 charge was from last January?) and you won’t be dreading the April 15th deadline. It also gives you the benefit of knowing your numbers consistently which means you can identify when things are going well and when something isn’t working quite right.
Make sure you’re paying taxes throughout the year (or putting money in a savings account for them). Even a fairly modest income results in upwards of $15k in taxes and it’s unlikely you have that laying around if you didn’t plan for it. Next week we’ll talk about things you can do for your business that lessen your tax burden as well.
If you take anything away from this post: Hire an accountant. A good one will tell you all the other things I said and more. Don’t hire them in March when you’re in a panic (well do, but after you make it through this year, ask them how to better prepare for next year). What’s the biggest tax lesson you’ve learned?