Running a small business is about more than knowing your product and your customer. You also have to manage your expenses, deal with payroll for employees, and keep all of your federal, state, and local tax information straight. Tax laws are complicated enough for individuals; for a business owner, they can seem downright incomprehensible. Plus, even an innocent tax error can yield serious consequences. Whether you plan to work with a professional tax consultant or are confident in your own tax filing abilities, you should take certain steps to ensure your financial future.Organize Your Files
Keeping your books and records in order is a year-round task-not just a frantic race in the weeks leading up to tax day. Set up a filing system and train yourself or your designated financial manager to use it, so that each important receipt and bill goes into its appropriate place. Not only will organized files help you better understand how your business operates on a day-to-day, specific level, but you'll also be prepared in the event that you hire a professional tax consultant to assist in your tax preparation. If you're unfortunate enough to suffer a tax audit, your organized documentation can help you prove your case to the IRS as well.
Stay on Top of Payroll
As a business owner, you are responsible for payroll taxes, a term that refers both to the tax withholdings from your employees' paychecks and to the tax you pay for employing each worker. Failure to file payroll taxes can lead to serious tax penalties. Failure to report payroll withholdings also carries a penalty. If you made a calculation error or have fallen behind on your payroll taxes, consider speaking to a payroll tax resolution specialist for guidance.
Prioritize Paperwork
You've got a lot on your plate when you run your own business, and it may be tempting to push financial paperwork to the bottom of the list. However, it's crucial that you deal with tax issues in a timely fashion. Missing an initial file date will result in fines and accumulating back taxes. Put off resolving those back taxes and the situation can snowball until you feel completely overwhelmed by your tax debt. Avoid tax liens, wage garnishment, and other penalties altogether by paying the correct amount before the deadline.
Small business tax issues can be stressful, confusing, and frustrating. But rather than ignoring or putting off unpleasant tax-related tasks, take charge by educating yourself on your tax obligations. Get your receipts out of that shoebox and purchase a proper filing cabinet. Finally, hire a CPA or tax attorney if you feel at all uncertain about your ability to properly handle matters. These professionals know the tax laws and can help you resolve past issues and maximize your tax benefits moving forward, so that your business can succeed.
Penny Jones is a small business owner and a senior Internet marketing strategist for Prospect Genius, a leader in local online advertising.
By Penny Q Jones
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