Starting a new business can be stressful enough without taking the time to think about filing taxes. However, the IRS takes tax payments and filing deadlines seriously making it important for new and old hat entrepreneurs alike to ensure they file their taxes on time, and pay any money owing. Failure to follow the rules, and keep up with your taxes can lead to massive fines and even charges of tax evasion.
Now that we have scared you to death it should be said that even the complicated tax system in the United States should not scare entrepreneurs away from starting a new business. Here are 5 tips to help you keep your business on track with the taxman.
1. Hire a Professional Accounting Firm
Many entrepreneurs write telling us they are going to DIY their taxes. Big mistake, for a few hundred dollars you could hire the best small business accounting firm payroll partners around to help you and your new small business or startup keep on top of its tax filing obligations. They can also help you understand how your business impacts our personal income taxes.
2. Make Voluntary Installment Payments
While it can be tempting for a business to hold on to its cash in case it either needs it or to use it for investments in the business, a monthly payment should be made to the IRS every month so that you do not get a massive bill at the end of the year.
3. Keep up to Date on the IRS Tax Tips
The IRS has a great website with tons of tips available to help taxpayers with their filings. It is also important to ensure anyone who is calling from the IRS is properly identified to ensure you are not giving personal information away to criminal organizations.
4. Download the App
Yes even the IRS has jumped on the app bandwagon having commissioned an app that allows the agency to push out tax tips to those who have downloaded the app to their phone.
5. Good Cloud Based Book Keeping Software
Talk to your accountant and discuss setting up a high quality, easy to use cloud-based book keeping software. This will make it easy to remotely add expenses and expense reports to your ledger and attach the necessary receipts from your smart phone. It will also make transmitting the information your accountant needs to the accountant a much more simplistic process.
It is always better for you to prepare your taxes months before the Tax Day. Approaching the deadline, you want your business to be as prepared as it can be. You can’t afford to expose yourself to too many surprises.
The tips above can help you prepare early. So, take this opportunity to take action today, not tomorrow.