Tax season is over. Everyone breathe a sigh of relief.
But don’t get too relaxed, because for you small business owners, tax time comes four times a year. Are you prepared for the next quarterly checkup? Stay on track with these five financial tips:
Keep your financial records up-to-date. We get it—no one wants to pour over accounts payable, receivables and cash flow. But it is important to keep these files organized and up-to-date. Make managing finances easier by employing financial tools that do most of the work for you. They are worth the investment and save a lot of time.
Don’t skip annual budgeting and financial forecasting. Data is knowledge. Creating a simple plan based off business insights and market trends can help you forecast and plan accordingly. If you don’t measure, how will you know if your business is on track?
Properly classify your employees. As more businesses outsource jobs to contractors, it is becoming increasingly important to correctly classify your hires. The IRS is paying close attention and misclassification can result in some pretty big fines.
Incorporate your business. Many small business owners choose an S.Corp or LLC filing for tax purposes. This simply means you file your business taxes at the same time as your personal income taxes, but the entities are kept separate. That way if something goes wrong with your business, you won’t lose any personal assets.
Don’t mix your personal expenses with your business expenses. Small businesses allow tax breaks and write offs including home office deductions, mileage, some business meals, utilities and travel expenses that are typically unavailable to the general population. Take advantage of these and don’t leave money on the table. But don’t over indulge—excessive deductions are a trigger for an audit.
Note: “Fresh Ideas” are published each week by Countybank and its family of financial service companies. With financial centers in Greenville and Greenwood, Countybank has a team of highly engaged professionals ready to bring a full scope of financial solutions designed to help families and business owners reach their goals.