3 Things to Know for Small Businesses & Tax Season
It’s not easy to own and run a small business, and there is perhaps no time as stressful to small business owners as tax season. So, as April 15 approaches, take note of these timely tips from Fidelity Bank of Florida, your community bank.
- Gather All Records: First and foremost, the most important aspect of handling the tax preparation for a small business is the keeping of comprehensive and accurate records; every expenditure, income, asset, and liability. In fact, you’ll even need to keep track of all taxes previously paid to all jurisdictions. If you have a company vehicle (or a personal vehicle you sometimes use for your business), you’ll want to have thorough logs of all business-related trips, no matter how seemingly inconsequential. Even if you do not end up itemizing fuel, maintenance, and other vehicle expenses, an accurate log can help you determine whether itemizing such (rather than using a fixed per-mile amount) is appropriate.
- Use the Right Forms: In most small business scenarios, having a professional prepare your taxes pays off, as you’ll likely receive a larger return and, hopefully, reduce your risk of being audited. What’s more, a professional can ensure you’re paying the appropriate taxes so that you do not accidentally underpay, which can lead to penalties that will cost you even more. All that being said, if you do decide to do your own tax preparation, be sure you use the right forms. The IRS has hundreds of different forms and many are extremely similar. Using the wrong forms can mean you have to re-submit your taxes, possibly with penalties added.
- Make Sure You Meet All Deadlines: One aspect of surviving tax season is meeting the April 15 deadline. This should go without saying. But, unfortunately, many small business owners miss filing deadlines. If you have quarterly payments, it’s important to make them on time. And if you file for an extension on your payment, you still have to file the paperwork by the due date.
Tax season doesn’t have to be a nightmare. If you go into tax season well-prepared, you’ll probably be breathing a lot easier on April 15. If you’d like further advice on getting your small business through tax season, be sure to contact Fidelity Bank of Florida, your community bank in Brevard County, at 321-452-0011.