How to Stay Ahead of Your Business’s Taxes

  • IRS and state tax rules for businesses tend to change every year.
  • To ensure that you are not caught by a tax surprise at the end of the year, you should continue to make estimated tax payments during the year.
  • You should keep track of all of your payroll reports, invoices, and other expenses incurred during the year.

When you are the owner of a business you are going to have a lot of different responsibilities that need to take place. One task that all business owners need to handle each year is paying taxes. Each year, all businesses need to file tax returns and pay their tax liability to both their state and the federal government. At the end of the year, it could seem like a rush to get this all down. However, there are a few tips that can be followed that will help you stay ahead of your business taxes.

By taking advantage of tax changes, you could save money off of your annual tax bill.

Know the Rules

One of the most important factors that can influence your ability to stay current with tax payments is to know the rules. IRS and state tax rules for businesses tend to change every year. While some annual changes are minor others can be quite significant. This can include changes to tax rates, the inclusion of new tax deductions, and a variety of other factors. It is important to understand what these changes are and to incorporate the changes into your business plan. By taking advantage of tax changes, you could save money off of your annual tax bill.

Make Estimated Payments

Your federal tax bill is not due until the end of the year. However, it can end up being a very daunting expense if you are not expecting it. To ensure that you are not caught by a tax surprise at the end of the year, you should continue to make estimated tax payments during the year. Some companies will make estimated tax payments monthly or quarterly. This way, when tax time comes, you will not have a major expense. Further, if you have over-estimated your tax bill, you can receive a refund for the amount that you sent.

Keep Records Organized During the Year

When you are going to file taxes for your business it will be up to you to have a backup for all of your revenue and expenses recorded. Ideally, you should make as many electronic payments as possible as it will make it easier to retain the records that you need. Further, you should keep track of all of your payroll reports, invoices, and other expenses incurred during the year. Having this information organized at the end of the year will make it easier to file your taxes and will ensure you are prepared if you are audited.

Get Help With Levy Release

A frustrating experience that some business owners may experience is a tax levy. If you fall behind on your tax payments and do not catch up with payments owed to the government, they do have the right to levy sanctions against you. This can include taking money from your bank accounts, freezing assets, or a variety of other penalties. While a tax levy can be challenging to deal with, a professional wage and bank levy removal service could help you manage it and have the sanctions better managed.

Managing the books and taxes for a business can seem very complicated.

Use Software for Bookkeeping and Taxes

Managing the books and taxes for a business can seem very complicated. It can require a lot of work to make sure that you are producing accurate financial statements, staying in compliance with your bank, and filing accurate taxes. Today, there are a variety of software programs that can make this easier for you. The small business accounting programs can help you manage your financial statements, which will link to your bank accounts, and can then provide necessary information to your tax preparation software. This can help save you time and ensure accuracy.

Start Early

While tax season does not start until late winter, you can always get started early. By starting to organize your books prior to the end of the preceding year you can help to keep your information properly organized. This will allow you to get started early and can help you manage challenges with your tax forms or tax bill before it’s too late.

Filing income taxes at the end of the year can seem like a daunting responsibility. While paying taxes can be expensive and inconvenient it is possible to stay organized and avoid a financial surprise. By following these tips, you can better stay ahead of your business taxes.

Featured image source: Pexels.com.

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Sierra Powell

Sierra Powell graduated from the University of Oklahoma with a major in Mass Communications and a minor in Writing. When she's not writing, she loves to cook, sew, and go hiking with her dogs.

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