Bookkeeping

What are some tax tips for small businesses?

Any pro tips for accounting / bookkeeping / tax that apply to most businesses?

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Answer

  1. 6 Answers

    Make sure your expenses and revenue are coded in your accounting system correctly using the correct chart of accounts. Too often this is done incorrectly, and the result is revamping and recoding all accounting entries. Keep accurate records of expenditures and revenue. Scan and file all receipts for gas, maintenance, travel, entertainment, and meals. Maintain comprehensive file of invoices, bank statements with the ability to track payments and interest. Taxes can be paid annually or estimated quarterly or semi-annually. If your estimate is too high, then expect a refund at the end of the year. If too low, expect to pay the amount due. However, the name of the game for corporate taxes its finding ways to reduce your overall tax liability. Go over all financial projections at the beginning of the year to estimate how much tax you may owe and how you may reduce tax liability. Having these meetings often can help direct your financial department (or you as the sole conductor of this enterprise) direct the business’ financial path close to the tax destination you desire to land.

  2. 2 Answers

    Here are my tips, some may have already been said:
    1. Keep all receipts possible
    2.Avoid using cash to pay for business expenses. By using a debit or credit card, there will always be a record of a transaction
    3. Open a separate bank account for your business. Bookkeepers hate trying to sort out what’s a personal and business transaction with a bank account.
    4. Maintain your books at least monthly. Trying to get an entire year’s accounting done before April 15th (The tax filing deadline) is really stressful.
    5. File your taxes, preferably on time. An obvious one, but it needs to be said. Penalties and interest for Failure to Failure can nearly double the original tax liability due.
    6. Depending on your level of comfort with accounting, hire a bookkeeper as soon as your revenue permits. Establishing good financial practices early is key for any business.

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