Pay Your Business Taxes and Keep Good Records
With April 15th fast approaching, entrepreneurs and small business owners throughout the country are scrambling to prepare their taxes. But some business owners place taxes at the bottom of their list of priorities. Perhaps they assume their business is a low risk for an audit, or maybe they just don’t know the proper way to manage their finances. Regardless, failure to maintain good accounting records and pay your taxes is a critical mistake that can send your business into the red zone.
Did You Know?
It’s estimated that over half (55%) of all small businesses will fail by year five, according to the website StatisticsBrain. Numbers such these paint a realistic picture of just how difficult it is to run a successful small business. However, familiarizing yourself with the reasons why small businesses fail will allow give you the upper hand, as you can make corrective actions to avoid them.
The same article cited above found “incompetence” to be the single most common reason why small businesses fail, which includes “nonpayment of taxes” and “no knowledge of financing.” Sure, it would be great if you could run a business without having to worry about taxes, but this isn’t the case. As the saying goes, there are only two things in life for certain: death and taxes, holds true when running a small business. You can’t expect to run a successful small business unless you maintain proper financial documents and pay your taxes.
Tax and Accounting Tips for Small Business Owners:
- Keep receipts of all business-related expenses. If you have a tendency to lose them, scan and upload digital copies to your hard drive.
- Remember to separate employees from independent contractors.
- Keep personal assets and bank accounts separate from your business-related finances.
- Charity donations are tax-deductible, so include them in your return if your business made any donations last year.
- Small business owners and entrepreneurs are typically required to make estimated quarterly payments based on their projected annual revenue. Failure to make these quarterly payments could result in a hefty fine come tax time.
- As always, if you have questions about your taxes talk with a professional CPA or tax accountant. Tax laws vary from year to year, so only a professional can provide you with the most up-to-date information.
This article brought to you by Intrepid Executive Group – A Global Financial Services Company.