MADE by Lorra Brown
If you put a little time and energy into preparing for the upcoming tax season, the whole process of submitting taxes could be a lot more painless than you ever thought possible. Here a few steps that you should be taking as a small business owner to make your process of filing taxes easier.
#1: Make sure you are tracking everything
This point cannot be overstated enough – you need to be tracking every invoice, every receipt, every bank statement, and every order request. If you think about the most painful process of tax season, it’s simply gathering together all the necessary paperwork and making sense of it all. So why not get an early jump on this?
For some small business owners, this simply means organizing a lot of paperwork into big, unseemly piles. But there are plenty of high-tech ways to make tracking a lot simpler. For example, there are plenty of apps for your smartphone that enable you to take photos of all of your invoices and receipts. In some cases, such as with the app Evernote, you can actually search them the way you would the Internet. So never underestimate the power of technology to make this part of tax planning even easier!
#2: Separate personal and business expenses
If you’re a solo business owner, and especially if you are a freelancer, you need to make sure that you carefully separating personal and business expenses. For example, let’s say that you attended a business conference in the beginning of the year that required you to travel. But then you decided to add on a few days to your trip before coming back home… Well, you need to separate out the “business” part of your trip from the “personal” part of your trip. And if you are planning on deducting client dinners or client-related entertainment expenses on your taxes, it’s best to jot down a few notes about what was discussed and how it tied into your business.
#3: Keep an eye on new tax deductions and upcoming changes to the U.S. tax code
With the Trump administration, there are big changes coming soon both for business tax rates and healthcare expenses – and both of them are going to have a huge impact on your taxes in 2018. You need to be keeping an eye on what’s happening in Washington as we head into the final month of the year. And, speaking of taxes, you’ll also want to keep potential tax deductions in mind. Just a few minor changes at the end of the year can have a big impact on how much you need to pay Uncle Sam.
If you’re a one- or two-person business, it might be possible to track much of your taxes using off-the-shelf software or special cloud-based accounting solutions. However, once your business has hit a certain size, it’s worth looking into how a professional CPA or accounting firm can help you make sense of tax-related matters on an ongoing basis.
About Lorra Brown:
Lorra Brown is the CEO of LBE Consulting, PLLC based in Grand Prairie, TX. Lorra is a multifaceted business strategist that works with a plethora of clients around the country. She provides accounting services and business consulting to a diverse bed of self employed professionals. Her life’s mission is to help women gain empowerment and change their mindset about their finances.
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