The Complete Small Business Tax Organizer Guide
A small business tax organizer helps them prevent mistake, blunders, and delay when filing tax returns. Generally, small businesses tend to avoid tax preparations until it’s the tax season. When the tax season arrives, they rush to their accountants and try to prepare the tax reports before the deadline. However, this gives way to frequent incidents of mistakes and delays in filing tax returns. This is why an owner should organize small business taxes. Let us take a look at different tactics a small business tax organizer uses, small business tax organizer templates, and the documents needed for small business taxes.
8 Healthy Tactics to Organize Small Business Taxes
A business should follow a set of habits and routines to reduce the work the tax preparers must do at the end of the year. More often, the tax returns are required to be filed every quarter. This is important to avoid penalties, financial risk, and non-compliance with federal and regional regulations.
1. Stay in touch with your accountant
Connect with your account and get to know the tax system they use. This can help you to understand the data and details you need to keep track of and in which form you should store them. Learn what documents are needed for small business taxes preparation for your state and the federal government. Keep in touch with your accountant year-round and take their advice occasionally.
2. Keep the Documents ready
Let’s start with what documents are needed for preparing tax returns for small businesses. You’ll need income statements, bills, receipts, invoices, expense reports, etc. A wise choice is to store your documents digitally, as this reduces the need for space and efficiently organizes them according to the date and file type.
You can also use tools like digital expense trackers such as Zoho and BizXpenseTracker, which come with auto-scan features to store receipts.
3. Organize the paper records
While you can store most documents on the cloud or digitally, you cannot wholly go paperless. Therefore, organize your paper records in different files and shelves monthly or weekly, depending on the amount of data. This is important to streamline the workflow so you know where to find a specific document when needed.
4. Take benefit of tax deductions
A business should not leave opportunities for reducing costs. Your small business or startup must take benefit of every tax deduction available. Therefore, take advantage of tax deductions on office supplies, company meals, loan interest, and mileage. The IRS guidelines for a business expense to be deductible is that it should be ordinary and necessary.
5. Check IRS guidelines
Check the revised Tax Cuts and Job Act and take note of the deductions and tax cut opportunities for your business. Now, keep the necessary records ready for these and claim these deductions at the end of the year. The IRS guidelines will help you develop a grasp on depreciation, expensing, and deduction, which is vital for your business.
6. Use separate credit card and account
To keep track of your business expenses, strictly stick to a separate bank account and credit card. Ensure you buy everything for the company with a business credit card, not your account or cash. For cash expenditure, keep a documented record. This will prove helpful in maintaining books, syncing transactions, and reconciling accounts.
7. Issue W-2 and 1099 forms by January 31
Every business is required to issue tax forms and deliver them to the independent contractors and employees by January 31. The complete information won’t be available before January, but you should keep the necessary information ready. This includes name, address, social security number, exemptions, paid time off, total wages, healthcare and retirement contributions, etc.
8. Dedicate weekly time for taxes
A tax routine is necessary for healthy corporate tax planning. To organize small business taxes, spend time on the tax and related documents every week. Dedicate a day for the taxation every week.
Small Business Tax Organizer Template
The small business tax organizer template helps you collect the documents and information you need to prepare for the tax season. The small business tax time checklist will prepare you for the annual tax filing.
Small Business Tax Organizer Tips That One Must Know
To organize small business taxes, you must approach the process more professionally. Even though you don’t prepare the tax returns yourself, an owner needs to know about the different things he needs to take care of for healthy tax reporting.
Go through these tips, which will keep you ready for the next tax season.
- Always use separate and office credit cards and bank accounts for company expenses.
- Minimize the use of paper and switch to digital documents
- Store the receipts and bills digitally with the help of expense tracker apps,
- Organize the paper records and documents and store them monthly or weekly.
- Keep track of the deductions and store the necessary information to claim them at the end of the year.
- Start collecting information by the end of the year to help you file the W-2 and 1099 forms by January 31.
- Go through the tax and deductions regulations by the IRS to help you reduce tax costs and avoid non-compliance
- Hire an accountant to manage your payroll and take care of tax reporting if you do that on behalf of your employees.
- Dedicate a weekly routine for tax preparation and ensure your company’s fiscal health remains sound.
- Check out the small business tax organizer template to help you keep the vital information ready for timely tax filing.
You can work with a tax organizer to simplify the tax preparation and planning for your business.
What Not to Do When It Comes to Tax Filing?
When it comes to taxes, there are a few things a small business owner should steer clear of. Let us see what not to do when preparing tax returns for your company.
- Don’t wait for the last month or days to prepare your tax returns.
- Don’t procrastinate organizing and storing the records, and maintain the records timely.
- Dont delay issuing the W2 and 1099 forms and issue them before January 31
- Don’t lose touch with your accountant.
- Don’t miss the deadline for tax filing for your small business.
Why Small Businesses Should Sign Up for Business Tax Services?
Businesses used to hire an in-house accountant to take care of the tax reports and filing. However, that adds to the expenses of the company. Small businesses now prefer to outsource it to business tax services. This saves their time and money spent on tax planning and reporting. Moreover, a business tax service uses cutting-edge technology and financial software to remove human errors and speed up the tax reporting process.
A business tax service calculates the company’s yearly income, reduces expenses, and cuts tax costs. It estimates suitable taxable income and claims the deductions and benefits to help the small business benefit highly. Moreover, the expert team has the know-how of financial and tax regulations of the federal government and state and helps your business to prevent penalties and lawsuits.
Allow Us to Handle Your Business Taxes!
A seasoned businessman knows that tax analysis is more of an opportunity than an expense. You’d be surprised if you realize how much you can save on tax costs with the help of tax planning, deductions, and benefits. Therefore, every business should invest in strategic tax research and planning.
We provide tax and business solutions for small and mid-sized businesses so that they can save on the expense of in-house accountants. Moreover, our latest technology and software revolutionize business taxation, saving time and increasing accuracy. Therefore, if you want to focus more on your business and outsource the taxes to a reliable partner, we can help.
We provide more than just business tax services. We help our clients with virtual bookkeeping, audit and assurance, payroll, and financial management as well. Moreover, checking out our business tax services comes without a commitment. Connect with us at TFN, opt for a free trial, and experience our services yourself.
Frequently Asked Questions
How do I create a small business tax organizer?
You can create the small business tax organizer yourself or ask your accountant to make it. Moreover, if you use accounting software, you can generate a tax organizer with it. Additionally, one can download a small business tax organizer template.
What is the purpose of the tax organizer?
The tax organizer helps the taxpayer convey essential information to the accountant or tax preparer. This information is vital for preparing and filing tax returns with the federal institution.
How can small businesses save taxes?
Small businesses can save taxes by reducing the tax cost and conducting tax research. They can gain from the tax deductions and benefits and outsource the taxation services to premier tax and business solutions.