For most small business owners, the workflow for dealing with tax preparation is usually not as well structured and streamlined as that of larger businesses. Most of this inactivity in filing can be traced to the burden of documentation and lack of understanding of the changing tax laws. Here are two simple and key points that will go a long way in simplifying how you approach your taxes again.
Staying updated on small business tax laws
With the Tax Cuts and Jobs Act 2017, a lot of changes are being introduced so it is important for every business owner to stay toe to toe with these changes. Attention needs to be paid to aspects such as the differences in taxation when it comes to hiring independent contractors and employees, renting and buying equipment, etc. In practice, aside from regular reading, it is advisable to employ a tax professional who can help prepare and file your returns and plug holes in your understanding of current tax law. This will help you apprehend what you are paying towards and where you stand with filing your returns.
Business Tax Return – Stay organized
Given that most of the complexity of filing tax returns resides in people digging through their dockets, files and boxes in search for receipts, invoices and other related documents, it is common sense to keep organized. As a business owner, depending on the volume of paper work, it is important to allocate a portion of the day or week to flip through and organize all your papers. Be it physical storage in boxes and files or as electronic documents. To ensure there is no loss of information, it is also advisable to take advantage of cloud storage platforms to secure all your important documents for future retrieval.
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Dedicated bookkeeping helps in the long run
There are many advantages to keeping up with your tax responsibilities aside from doing your due diligence to the country. Read about four-growth killing small business accounting problems and solutions. A better understanding and regular filing means you know exactly how much money is available to sink into your day to day business decisions. This leads to increased productivity and also reduced tax liabilities as a result of claiming eligible deductions and tax credits.
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