Tax Time Tips for Business Owners

Getting Organized

Getting organized is one of the most important things a business owner can do. But this is not just an end of the year project. Organization begins with accurately keeping track of every transaction for the whole year. I personally recommend using an accounting software that is user friendly and can integrate with your business bank accounts.

Keeping up with your books will not only make your tax return process smoother, it will allow you to understand if your business is operating efficiently. With an accurate set of books you can see where your money is coming from and where it is going in nearly real time.

Saving Receipts

Saving receipts is extremely important and one of the major pitfalls of small business owners. If you are ever challeneged by the IRS, they will without a doubt want to see the receipts!

Most softwares will actually allow you to attach a picture of the receipt to the transaction, making it very easy to locate should the need arise. However, any method of saving receipts that will allow you to find them later is perfectly OK. A filing cabinet, hard drive, or electronic store such as Google Drive or Dropbox are all great options.

Choosing an Accounting Software

Choosing the right accounting software is not easy, but there are plenty of options! The most comprehensive and easy to use software for small business owners is Quickbooks, which is at the top of my recommendation list. If you are just starting out and cash is tight, there are free options such as Wave Accounting.

You want to make sure that whichever software you choose has the abiity to integrate with your bank accounts and automatically pull in your transactions. This is very helpful from a time saving perspective as well as making sure you don't miss any transactions. Our office would be happy to assist you in exploring your software options.

Business Use of Personal Items

Often times business owners use their personal vehicle for work or have an office in their home. This has become increasingly common since the pandamic forced everyone back inside.

It is important to keep accurate records of vehicle use and your home office. For your vehicle, you'll want to keep track of  both your mileage and your expenses related to operating and maintaining the vehicle. For the home office, you'll want to keep records of the size of the office and the expenses related to the upkeep of your home. I will address these in more detail in another blog.

We're happy to help!

If you need help getting organized, choosing an accounting software, or have questions about setting yourself and your business up for success, reach out today! With over 10 years of experience working with small businesses and their owners, there is no problem too big or too small. Contact us!

- Austin Bell, President