Are you planning on starting a small business or have you completed your first year as an entrepreneur?
If so, you have to prepare yourself for one of the worst aspects of running a business: preparing a small business tax return!
You want to ensure that you don’t make mistakes with filing your tax return. You want to avoid paying any penalties or having any audits on your business.
You also want to find a way to reduce your tax burden so you can re-invest your money into your company.
Here’s what you need to do:
Find Help
The best thing that you can do as a small business entrepreneur is to seek help. The first step is to use a tax return calculator to estimate how much you’ll owe.
Afterward, you’ll want to seek professional help with filing a tax return. You can use a service such as www.taxfyle.com/small-business-tax-filing to help you file your tax return. They’ll also keep an eye on your tax return status so you can focus on your work!
They’ll also help you find ways to legally reduce your tax burden. In the long run, they can help you assess the financial health of your company.
Financial Records
You’ve also got to make sure you keep accurate financial records from when you start your business.
The first is to make sure you keep records of your cash flow. This is how much money comes into your business. Then, you want to keep records of every expense.
This will make it easier to calculate your profits and losses. You also want to make sure you have documents to verify cash flow and expenses. For example, keep a copy of all invoices that you send your clients and vendors.
Make sure you also keep a receipt of every purchase you make for your small business. In the event of an audit, you’ll need these documents to verify your cash flow and expenses.
You want to keep your records in a spreadsheet. You want to have a copy of this spreadsheet stored across multiple devices.
You can also consider storing it on a cloud storage solution. Make sure you also have a hard copy to provide your tax advisor.
Receipts and invoices should also have a digital copy and a hard copy. Make sure you have multiple copies of each in case one gets lost or destroyed.
You also want to immediately enter your expenses in your spreadsheet as soon as you incur them!
Prepare Your Small Business Tax Return
Now that you know how to prepare your small business tax return, you can find the right help.
Make sure you first use a tax calculator to get an idea of how much you’ll owe. Next, you want to hire professional services to get an accurate estimate of your tax obligations.
Be sure to cultivate a relationship with a tax advisor. They’ll assess your company’s financial health and help you grow your net worth in the long run.
You can also find more great financial tips on our blog!