By Alice Neuhauser
The upcoming tax season could be a stressful time for many entrepreneurs, especially coming out of 2020 where businesses across so many industries were impacted by the effects of COVID-19. Planning ahead and getting organized with taxes now will help small business owners mitigate the process later, so they can focus on growing their businesses.
Entrepreneurs can prepare ahead to coordinate and alleviate the tax filing process with the following do’s and don’ts.
To Do’s for A Stress-Free Tax Season
Maintain a system to keep track of paperwork
The success of your organization relies on developing and sustaining a productive record system. A record keeping system, whether basic or complex, must be easy to use and provide sufficient record storage and orderly retrieval.
If you are not proactive in a productive framework, you’ll fall behind. Having a system ensures that important documents can be easily found, making the process of filing even less complicated because all documents are ready to go to your tax preparer. One of the easiest ways to go about this is maintaining your own internal compliance schedule; calendaring your reminders in advance is a surefire way to set yourself up for success.
Be mindful of various deadlines for different types of taxes
One of the more overwhelming parts of taxes for businesses is the large number of varying deadlines, with different filing requirements.
April 15th is the date most people associate with tax deadlines. Small business owners cannot forget about quarterly taxes too. These estimated tax payments are due 15 days after the end of the quarter, which are filed annually. April, June, September, and January 15th; which is for the fourth quarter of the previous tax year, are the usual deadlines for quarterly federal and state taxes.
Make sure your tax preparer keeps you aware of all these and other deadlines. But if you’re keeping up with your paperwork, keeping up with the varying deadlines, including quarterly tax deadlines should be a piece of cake.
Allocating enough time for filing
Budget time for things to go wrong; even the most organized can miss a valuable piece of paperwork or deadline or check the wrong box on a form. Businesses must properly budget their time for taxes, and developing a calendar to work into your yearly schedule can ensure you’re on pace and meeting deadlines.
Sometimes no matter how organized you are or how many boxes you tick, things can be out of your control. This year, we’re not only seeing deadlines change, but sometimes even the forms themselves!
One Major Don’t For A Stress-Free Tax Season
Don’t put it off or miss out on applicable tax credits
Being thorough with your paperwork and keeping up with deadlines is the quickest way to get through taxes, making the process less stressful and painful for everyone involved.
Every year, people put off paying taxes, which is a regrettable mistake. All it does is generate more hassle and cost as you delay for the last second, or worse, until you’ve missed a deadline.
Furthermore, if you put it off, you might miss out on valuable tax credits that may be available to your small business. Not all tax credits are eligible through tax filings, so it is necessary to do your homework into what is out there, and make sure to apply for them. It is crucial that those who need it get the credits they are eligible for, especially with the pandemic hurting many small businesses.
The bottom line is that if you handle your taxes in a structured, measured, fashion the entire process is easier. Planning in advance takes the anxiety out of filing your taxes, especially when it’s all new to you as a small business owner. Staying on top of everything, including your taxes can mean for a lot of success, leading to you meeting your business goals!
About The Author
Alice P. Neuhauser is Seismic Capital Company’s Chief Financial Officer and Treasurer. She can be reached at apn@seismic.company or via phone at (310) 275-7505. Seismic’s website is https://seismic.company/
