Being a small business owner presents many exciting opportunities, like carving out your own vision, pursuing your passions, and cultivating a culture. However, there are also many challenges that come with being your own boss, such as filing taxes. Here are some ways to simplify your small business’s tax preparation.

How to Efficiently Manage Your Taxes

1. Keep Personal Expenses Separate From Business

Mixing business and personal expenses complicates bookkeeping and tax preparation, and it presents the risk of sending a red-flag to the IRS. The number of audit hours required for a public audit in 2013 averaged 17,525, at an estimated average cost of $249 per hour. Prevent the hassle and expense of an audit while simplifying operations by using separate bank and credit accounts for business expenses.

2. Stay Organized

Too frequently, filing tax returns can be a nightmare for small business owners. This is usually because data is gathered in a rushed period of time and is inaccurate or incomplete as a result. Staying organized all year saves time and reduces stress — two aspects all small business owners could benefit from. Conduct proactive tax maintenance throughout the year by scheduling regular checkpoint meetings with financial advisors, keeping separate files for taxes, and digitizing receipts.

3. Incorporate Taxes Into Your Financial Planning

Work with your financial strategists to make taxes part of your overall financial planning. This way, your year-long planning will ensure you’re ready for the next tax season. Start strategizing in January, and ensure records are being properly maintained throughout the summer. Towards year’s end, meet with your financial planners to make sure you've covered all possible tax strategies.

4. Use Accounting Software

Spreadsheet software like Excel are excellent tools, but it can be time-consuming to master and manage. Accounting software is an inexpensive and user-friendly way to consolidate your business finances. Invoicing, payroll, and expenses will be easier to manage, along with pertinent tax-related information. It also reduces the factor of human error and improves time management and productivity.

5. Hire a Professional Accountant

Small business owners tend to be DIY’ers and try to run all aspects of the business by themselves. However, most small business owners don’t specialize in tax preparation, and even those who do should not be devoting their time to tasks like this. An experienced and reliable accountant will act as a business advisor as well as tax strategist. They know how to best prepare your taxes and provide solid asset protection.

Economic Strategist provides efficient tax preparation, wealth management, and other financial services to the businesses of Addison, TX. They offer exceptional business consulting and financial management to businesses of all sizes. Visit their website to find out more about the company, or give them a call at (214) 383-1350 to speak with one of their experienced financial team members today.