Teaspiller Business Tax Planning
by ELIZABETH CHECKLEYSmall businesses have a higher probability of being audited by the IRS due to the nature of the amount of deductions and the flow of income into a company. The proper business tax planning strategies can help protect your income and your company from a tax audit.
How Do I Best Go About Tax Planning for my Business
- Record management. Most businesses do not keep good records of all receipts and documentation of income received.
- Separate your small business accounts from your personal accounts. This includes credit cards. This will make is much easier to setup the appropriate bookkeeping software you need for your business.
- Receipt management tools. There are a wealth of online software service tools on the market to help small businesses better manage their receipts (including Shoeboxed.com and Officedrop.com).
- Invoice management tools. For invoicing as well consider using sites like Freshbooks.com.
- Bookkeeping. Proper bookkeeping is essential—it will help you better forecast your income, expenses, and point out problems instantly.
- Bookkeeping tools. Consider using sites like LessAccounting.com. Accounting software is getting easier to use and also providing better graphs. Link you business cards and business bank accounts to get weekly emails on your business’s performance.
- Quarterly Estimate Payments. A lot of businesses don’t realize that they have to make quarterly estimated tax payments. Once you have the appropriate bookkeeping software in place, making estimated tax payments on a quarterly basis should be a cinch.
- Think through your legal structure. Think about talking to an accountant to make sure that the legal structure for your company is protecting you from personal lawsuits as well as minimizing your tax liability.
- Hire a Tax Expert. If you’re not an accounting or tax expert (and don’t want to invest the time to be one), strongly consider hiring a tax expert to help you through this process. You can find affordable tax experts here who can you help do all of the above on Teaspiller. Here are some suggestions in choosing a tax expert.
- Certification. Look for a tax expert who is a CPA or an IRS Enrolled Agent. These are certifications with rigorous standards and will ensure you get a basic level of competency from your tax expert.
- Experience. Look for tax experts with at least a few years of experience. Look at their professional experience, ask them how many small business clients they have, and if they have experience with IRS audits.
- Specialties. Some tax experts might have a higher density of expertise in a specific industry--leveraging their current client base experience for your small business.
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