By Rieva Lesonsky
Are you frantically getting your taxes together for Tax Day April 15? Or maybe you’re already done with your tax planning and filing, and feeling smug. Whichever the case, it’s time to start thinking about tax season—next year’s tax season, that is. No, I’m not joking. Right now (or April 16, if you’re not done with your 2012 taxes yet) is the ideal time to start tax planning for 2013. Try these 3 small business tax tips to get ready for next year.
1. Get professional help. You may be able to file your business taxes yourself, and if it’s honestly easy for you (say, you’re an accountant yourself, you love crunching numbers and reading tax laws, or your business is a sole proprietorship with very simple income and expenses), that’s great. But for most of us, one of the best small business tax planning tips is to hire a pro.
Small business owners are notoriously bad at delegating, but tax season is one time when delegating to the pros makes sense. Accountants spend their lives keeping up with arcane tax laws, so they know what deductions you can and can’t take and how to maximize your savings and minimize your expenses. If you don’t already have one, find a good accountant who specializes in small businesses and/or your industry—you’ll probably save the cost of him or her several times over.
2. Keep good records. Your accountant can recommend a bookkeeping system that works for you, whether that’s QuickBooks or something else. Keeping good records all year, not just at tax season, is crucial to tax planning. Save expense receipts (you can scan these into your computer and store them digitally to save space) and records of automotive expenses and mileage, travel and entertainment and anything else that you plan to deduct as a business expense. Tax laws also dictate keeping copies of your income tax returns, records of equipment purchases and records relating to your employees’ wages and taxes paid. Your accountant can advise you about tax laws’ requirements as to what specific records you need to keep and how long to save records.
3. Learn from your mistakes. What do you wish you’d done differently this tax season? Did you prepare taxes yourself and are you worried you misunderstood some tax laws? Did you wait till the last minute to present your accountant with a shoebox full of receipts? Did you put off organizing your small business expenses until this weekend and stay up for 48 hours bleary-eyed? Did you fail to make some basic tax planning moves that could have saved you money? Whatever you wish you had done for last year, plan now to do it for the 2013 tax season.