Owning a successful small business online is rewarding. Still, it has many obligations, such as filing and paying your taxes on time. Otherwise, you’ll be saying goodbye to your profits as they will go straight to the IRS.
And when tax time comes around, you’ll want to maximize all the deductions and credits available. Learn how to jumpstart your business taxes this tax season with these five tips!
#1. Mark Your Calendars
Missing a deadline can result in expensive late fees. To avoid any unwanted surprises, add these dates to your calendar, and don’t miss a single deadline:
- April 15 is the day for filing your federal tax return. If you need more time, you can file for an extension, but be aware that you will still need to pay any taxes owed by this date.
- June 15 is the deadline for filing your state tax return if you live in Alabama, Louisiana, or Maine. For residents of all other states, the deadline is on April 15.
- October 15 is when you have to decide to file for a tax extension for your federal taxes.
- If your business earned more than $1,000 this year, then you’ll also have to watch out for April 15, June 15, September 15, and January 15. These are the filing dates for federal quarterly estimated tax payments.
#2. Organize Your Receipts
If you’re like most people, your desk is probably cluttered with stacks of paper receipts. So no wonder you have been delaying your tax filing.
But thanks to accounting software, storing your receipts online is easy. It’s a great way to reduce paper trail and save some sleep come tax time. Plus, online storing is much more preferred by business owners since the government requires you to keep data for over half a decade.
With technology, you can save your receipts through these options.
- Take a photo of your receipt and upload it to a cloud-based storage service like Dropbox or Google Drive. This way, it’s saved in the cloud, and you have personal access to it.
- You can also purchase a dedicated tracker such as Expensify or Shoeboxed. These apps let you snap photos of your receipts and then categorize and track your expenses, making it easy to see where your money is going.
- Lastly, QuickBooks bookkeeping features let you scan, upload and automate your receipts and all paper documents. This is the quickest way to reconcile transactions as it automatically matches your sales and invoices. All you have to do is to audit.
#3. Get a Real-Time Bookkeeping System
Nowadays, whether you’re an FBA seller or not, you can’t say you own an online business without investing in bookkeeping software. But if you want to get ahead of your tax obligations, it pays to get a real-time bookkeeping and accounting system. Aside from its obvious features, another add-on is tax management.
As long as you can set up your accounting software properly, you’ll have less workload while filing taxes. In fact, financial tools can also offer tax filing forms such as:
- Payroll tax forms and W2s
- Form 1040 Schedule C-EZ
- Form 1040-ES
#4. File for a Tax Extension
The first few years of your business are normally busy and unorganized, so sometimes, you still won’t get a grip on managing your tax returns. Thankfully, the government allows businesses to file for extensions.
However, filing for an extension doesn’t mean filing for an extension for your payments. This gives only you ample time to fix your reports to be submitted to the IRS.
Also, remember that even if you file for an extension, you’ll still have to pay your taxes on the regular deadline. This is to avoid failure-to-file penalties if ever you’re busy with other business operations or have missing financial data. So if you’re unsure how much you owe, it’s best to err on the side of caution and file your returns on time.
#5. Get a Tax Accountant
Handling your personal taxes is a headache. And when you deal with business taxes, it’s just a whole other level. So instead of filing and fixing your taxes alone, consider getting yourself an accountant who’s well-versed and experienced in accounting and tax compliance for online businesses.
Suppose you have a complex business with multiple entities and international operations. In that case, you’ll need an accountant who specializes in these areas and one that can navigate the ever-changing tax code.
If you’re a small business owner, you might want to find an accountant who bills by the hour, so you only pay for the services you need. And if you’re unsure what you need, look for an accountant who offers a free consultation to assess your needs and provide options.
That’s it for our tax tips! These simple yet often forgotten tips will help jumpstart your business taxes, reduce the workload during tax season, and boost your sales. If you want to improve your online business and its books, check out some of our other informative articles on a range of small business topics.