As a small business owner, you may look at the approaching tax season as a headache waiting to happen. However, with a few easy steps, you can tackle your taxes painlessly this season and in the future! Below are three ways to prepare for the upcoming tax season, and three things to do now to make 2014’s tax season even more effortless.
1. Include all deductions. Take the time to include all deductions for items you paid for with personal funds or cash when preparing your financial statements. It’s a good idea to do this on the same day each month (set a calendar reminder), so you don’t forget, and therefore lose out on valuable deductions.
2. Be organized. Your tax professional will thank you if you provide your business data in an organized and easy-to-read fashion. Submit a QuickBooks data file or a print out of your business’s profit and loss, balance sheet and general ledger. Be sure to provide the information clearly and list expenses by type (office supplies, rent, etc.).
3. Report your charitable work. Don’t forget to report any charitable donations of business inventory or assets to your tax professional. Remember that while these transactions are write offs for your business, any time you spend on a charitable activity is not—the IRS values it at zero.
1. Do your research. Come up with a list of questions you have regarding all things tax-related (laws, benefits, etc.) and give them to your tax professional. Use resources such as the IRS website for more information about business tax laws and to help you make the best decisions for your business.
2. Track sold assets. Throughout the year, keep track of any sold or disposed business assets. These include equipment, computers, and vehicles. Your tax professional will need to know when and how much the sale was worth, and by keeping track of these as they occur, you’ll avoid having to find the information come tax time.
3. Keep all receipts. Commonly red-flagged items, such as meals or travel, will need documentation. While a receipt isn’t necessary for tabs less than $75, you’ll have to be able to note the date, place, business purpose and total of each transaction, so it’s both easier and faster to simply keep the receipt.
For more tax tips, read the article “Ten Tax Tips for Business Owners” by Bonnie Lee, a tax expert and author.
For more information about Telhio financial services, visit Telhio.org or call 614-221-3233.
Telhio Credit Union is a full-service financial institution open to everyone who lives, works, worships, or attends school within Franklin County and surrounding communities. Founded in 1934, originally as the credit union for the Columbus Telephone Company, Telhio is a not-for-profit financial cooperative where its members are also its owners. Driven by its philosophy that members come first, Telhio is committed to the highest standards of responsibility and conduct. Telhio offers a variety of innovative programs, services and products to support its members’ financial needs. Telhio offers seven branch offices throughout Central Ohio and nearly 4,000 shared branching locations nationwide. Additionally, Telhio credit union participates in the highest level of combined federal and private share savings insurance available, insuring deposit accounts up to $500,000.*
*Federally insured by NCUA. Additional coverage up to $250,000 provided by Excess Share Insurance Corporation, a licensed insurance company.