As an entrepreneur, you want to spend your time and energy focused on growing your business and making money, not on tax filing paperwork or preparing complicated tax returns.
Fortunately, there are many ways to ensure that you only pay what you have to when it comes to taxes and to get the best refund possible if you have overpaid throughout the year. Here are 10 things that every entrepreneur should know about a cheap tax return for their business.
Don’t leave until the last minute
Sitting down and doing your taxes is never an easy task. However, doing your taxes at the last minute will cost you more money than if you were to just do them on time. In addition, those last-minute tax prep fees can be a serious drain on your already shrinking bank account.
The best thing that you can do is to prepare yourself in advance and create a budget that outlines all of the possible costs associated with running your business. Once you have this budget created, you’ll know how much money needs to be set aside for taxes. These funds should be kept separate from any other funds so they don’t get mixed up.
Separating these funds into one place also makes it easier to keep track of what has been spent. If it’s not too late, make sure you visit the IRS website and download any forms that you may need before filing your taxes. It is also important to note that when completing your taxes, it’s important to list every expense even if it was reimbursed by someone else.
Make sure you have all forms
Tax returns may seem like an afterthought for your small business, but it’s important to be aware of tax laws and how they will affect your business. Make sure you understand what the IRS is looking for in a tax return and how to best report income and deductions to minimize total taxes owed.
Asking these questions can help you determine if cheap tax returns are right for your business:
- How much money will I make?
- Am I providing services or a product?
- What kind of work do I provide?
- How does my state file income taxes?
- Do I have employees or do all my jobs as a sole proprietor?
- Is there anything that exempts me from paying any taxes at all?
Use software to keep track of expenses
The software can help you save time and avoid math errors when it comes to keeping track of your business expenses. There are many different kinds of software that offer easy access to the data you need, so it’s easy to find one that suits your needs best.
When picking out a program, remember that some programs are compatible with only PCs while others can be used on any type of device. Make sure the software is compatible with your smartphone or tablet if you need this capability. There are many different kinds of software packages available and they’re all geared toward different types of businesses or uses.
E-Filing can speed up delivery by months!
If you get a tax return as an individual, your refund will be sent to the address listed on your income tax return. When you have a business, it is important to remember that the rules are different.
Unlike refunds for individuals which are generally delivered within 21 days of filing electronically, or within 36 days if filed on paper, the IRS e-file allows businesses to submit their returns early and receive their refund at the same time as individuals. This means that an e-filed business tax return can be delivered in as little as 8 days from submission!
There are still big savings even if you miss deadlines by a few days
Even if you missed the deadline by a few days, it doesn’t mean you can’t save on taxes. The IRS takes extra time to process tax returns from April 16-18th, so file as soon as possible.
Additionally, refunds will take longer than normal to receive because the holiday slows down mail service. What you need to do is complete and submit your tax return before those deadlines pass.
File electronically and use direct deposit for your refund. Both of these methods are fast and easy ways to get a refund in just days. It’s also worth noting that refunds with paper checks could take up to three weeks to arrive in some cases!
Ask your accountant to help with year-end planning
A lot of people don’t know that a tax return is an important part of financial planning for their business. If you or your accountant has any questions about your tax return, you should ask them as soon as possible so that everything can be taken care of before the end of the year.
It’s a really good idea to plan and get your year-end checklist together! Get acquainted with any new rules and regulations that may affect your business. Keep up with filing deadlines. Don’t forget about extensions! Make sure you are fully aware of how changes in the economy might affect your finances this year.
It’s important to take breaks while preparing taxes
In the course of preparing taxes, we all make mistakes. The most important thing is to know what you need to do when an error pops up during your preparation for the year. Go back over your work and fix any errors that need to be fixed.
In the case of more serious mistakes, you may have to file an amended return on which you’ll pay interest and penalties based on how long it took you to file your original return (or amend). Thankfully, taking breaks while doing your taxes helps relieve stress, decreases boredom, and allows time for creativity!
Conclusion
Before you start looking for the best company to handle your business taxes, it is important to know what type of filing you need. Don’t be discouraged if you aren’t immediately familiar with the different types of tax filings. The things outlined in this blog post should give you a good foundation for understanding how and when to file for business taxes.
