Did you know that a lot of small businesses end up in trouble when it comes to their tax? The fact is that issues with taxes are incredibly common when it comes to startups and freelancers because often there is a lack of knowledge about the issues that a lack of financial planning for tax season can cause.
However, there is good news when it comes to managing your tax return as a small business or freelancer; it doesn’t have to be an overly stressful experience. The fact is if you want to avoid problems from occurring when it comes to your taxes, there’s plenty of steps that you can take, so there is no need to worry.
So, take a sip from your water bottle and settle in. Here are the steps and how you can utilise them to make tax troubles less likely.
Keep detailed records
When it comes to making tax season easier for yourself, keeping detailed records is a must. The fact is that by writing down each and every expense related to your business or freelance service, will make calculating your taxes that little bit easier and less stressful for you, or your accountant. Read more now about online retail trends and also look up the apps that you can connect your business bank account up to, which automatically note down all spending - these apps are incredible, one of the best is QuickBooks.
Separate your personal and business finances
You may have already done this, but just in case you haven’t, it is worth repeating - separate your personal and business finances. If you want to ensure that when it comes to your business’s accounting that everything goes smoothly, it is vital that you have two separate systems: one for your personal banking and one for your business banking, as well as different accounts. The best way to deal with this is to pay yourself a salary from your business bank account each month, just like you pay your employees (if you have any) so that your personal and business finances don’t mix in any way.
Hire an accountant
While you could deal with your accounting yourself, the fact is that tax returns can be complex. Knowing what you should and shouldn’t claim for can be a struggle, which is why hiring an expert (make sure you know the difference https://www.kazmilaw.com/notorizations) could be the answer. The fact is that using an accountant will come at a cost, but if you choose to use an accountant you have less chance of being investigated by the government for fraud, which makes the cost more than worth it.
Put a little aside each month
To ensure that you can afford to cover your tax bill, make sure to set aside a little bit of money each month. Ideally, this should be at least 10% of your business’s monthly income. By putting money aside each month, you can ensure that when it comes to having to pay your tax bill, you have plenty of money to afford to pay it. If you can’t pay your tax bill on time, you end up getting fines and fees added onto your bill, which is why paying on time is so important.
There you have it, everything that you should know about tax trouble, and how you can ensure that your business doesn’t end up in a mess come tax season.