Tax Month

Indeed, the tax man cometh; and if you’re like so many other small businesses the days leading up to the Ides of April are some of the most stressful every year. Many small businesses do their own taxes, keep shoddy records or flat-out fake their tax returns. All of these practices can land you in hot water with the IRS, and all of them can cost you money. If you want to be confident your tax return is bullet proof and you’re not overpaying on your small business taxes, take the following 10 small business tax tips to heart.


1. Keep receipts

I know, I know. Maintaining a log of business receipts is boorish. After all, you have better things to do: like paying IRS fines, right? Modern services such as make it easy to simply stuff all your receipts into an envelope and let someone else sort it out, so there’s no excuse for poor receipt management. Moreover, keeping receipts will help you ensure you’re getting full deductions.

2. Invest in accounting

You don’t have to have a full-time accountant on staff, nor do you have to slog around in Quickbooks. All you have to do is maintain an easy-to-use business accounting program to track receipts and expenses. Outright and Freshbooks fit the bill.

3. Know your deductions

You probably know you can deduct your office supplies, home office, marketing, health insurance, retirement, employee benefits and other business expenses. But did you know you can also deduct loan interest and unpaid debts? Do your research to understand all the deductions your specific business is eligible for.

steamline process

4. Streamline your processes

Business accounting is a pain, but you can make it easier by streamlining your processes. Shoeboxed integrates with accounting software, which can integrate with your business bank account, for example; giving you a complete world-view of your business finances without having to enter a single line item. Consider hiring a part-time bookkeeper to double-check accuracy. Delegation can free time to work on what you truly enjoy, and also ensure your tax documents are accurate.

5. Track travel

Tracking mileage can be more beneficial than simply taking standard business travel deductions, but remembering to write down your odometer status every time you run to your satellite office can be next to impossible. Mobile apps such as Mileage Tracker can make the process super easy.

6. Hire your spouse

You might have found that filing jointly with your spouse can have certain tax benefits, but having your spouse on the payroll can bring even more benefits to the table. For example, you can hire your spouse and give them an employee benefits package that also covers you – all tax deductible.

structure business

7. Structure your business for tax season

Your LLC might be better served as an S-corporation, especially when it comes time for tax season. Consult with a tax professional to determine how you should structure your business to take full advantage of the tax code.

8. Make estimated payments

You should make quarterly estimated payments to satisfy Uncle Sam and to lessen your end-of-year tax burden. You can also place funds in an account set aside exclusively for paying taxes. At the end of the year, you won’t put your business in a bind if you owe.

9. Get a mid-year review

Avoiding unpleasant surprises is one of the best ways to ensure you’re paying your legal tax liability without overpaying your share. One way to stay on track is to invest in a mid-year review to see if your estimated payments are covering your likely tax burden. This is especially true for growing companies that might be making estimated payments based on lower revenues than they’re earning at mid-year.

10. Hire a professional

Ultimately, hiring a tax professional to pay your taxes will save time and money – and will definitely save you from stress and headaches. When a professional prepares your taxes, they’re also putting their name on the line and will stand by you in the event of an audit.

Do you have any additional tax tips for small businesses? Share them in the comments!