Small Business Tax Tips for Less Stress at Tax Time

Person preparing tax documents on floor including forms, pen, and calculator

Taxes are no fun. (Unless you’re a tax preparer. And if so, have we got a blog for you: How to Incentivize Clients to Turn Their Taxes in Early. But that’s another story.) This story here is about you, the small business owner who, like the rest of us, dreads tax season each year and is determined to take the stress out of “April 15.” Below are a few small business tax tips designed to see you sane and smiling on the other side of tax filing day.

Pay Estimated Quarterly Taxes

If you’re a sole proprietorship reporting business income on Schedule C, you should make quarterly tax payments that include self-employment and income tax. If you’re a small business owner and you predict you will not owe more than $1,000 at the end of the financial year, you don’t need to make quarterly payments. Estimate your year-end tax bill and contribute quarterly by filing Form 1040-ES on April 15, June 15, September 15, and January 15.

Set Aside Funds for Payroll Taxes

If you’re a small business owner with a team, set aside cash for payroll and employment taxes such as social security, Medicare, and Federal income tax.

Don’t Forget the Golden Years: Contribute to Your Retirement Account

Whether it’s the maximum allowed or a token amount that keeps your head in the game, make part of your tax preparation adding to a retirement account such as an IRA, Roth IRA, or 401(k). The tax breaks are significant and the peace of mind is priceless.

DIY Taxes Are Not Right for Every Small Business

Although some business owners eat spreadsheets for breakfast with overnight oats and a stiff espresso, many of us are less than soothed by spreadsheets, paperwork, financial jargon and the application of “if/then” statements to dollars, cents, and taxes owed. This can lead to procrastination and stress. Tax prep is no different from other areas of your business: Outsourcing what drains you leaves room for more growth, innovation, high quality, and top-notch customer service that got you this far in the first place.

Goldie Locks of Small Business Taxes: File Early, File Late, or File Just in Time?

First, just the facts (er, tax): When do small businesses file taxes? It depends, but mostly:

April 15: When you use a Schedule C with Form 1040, or file Form 1120 for a corporation, you usually need to file your return by April 15. If you are taxed as a C-Corp, you need to file a Form 1120, you must file it by the 15th day of the fourth month following the close of the tax year, which is usually April 15 (or the next business day if it falls on a weekend or holiday).

March 15: If you are taxed as an S-Corp or as a partnership, you need to file a Form 1120S or Form 1065. If you use Form 1120S, you must file it by the 15th day of the third month following the close of the tax year, which for most S-Corps is March 15.

Benefits of Filing Early:

For the early birds among us, filing early provides a confidence boost and a clear head while your neighboring businesses may be scrambling to find receipts and book appointments. Early filers are more likely to get their preferred date and time when making an appointment with their tax person. Also, filing early allows you built-in time to fix mistakes and collect documents you may not have realized you needed. Finally, and perhaps most importantly, filing early means the chore is behind you and you can sit back and put your feet up during the weeks or months you might have otherwise lost sleep.

Benefits of Filing Late:

If tax season happens to be your busy season for your small business, neither a March 15 nor an April 15 may be doable without other areas of your business suffering. Consider reducing stress before it starts by planning to file an extension.

Benefits of Filing Right on Time:

A good way to avoid tax season stress is to plan for a standard filing date and take daily steps to get there.

Track and separate business vs personal finances daily
Keep and file receipts daily and weekly
Save for employee tax contributions monthly
Save for retirement contributions monthly

Keep the Stress at Bay with Small Steps All Year Long

Whether you file early, late, or somewhere in between, a sure way to reduce stress and keep you feeling confident when you hear the word “taxes,” is by gathering receipts and setting aside funds all year long.

Want to Inspire Your Team Toward Small Business Tax Prep?

Getting ready for tax season doesn’t have to be all stress and handwringing. Solicit the help of your team to keep receipts all year long, and keep a smile on their face as they do, with a few choice tax-related pieces, customized with your company name. We like these:

Non-Woven Document Sleeve with Zipper: For receipts of all kinds. Choose various colors for different months and categories.

Tangle® Stress Reliever: Tax time doesn’t have to be a tangled mess. Give your team a customized stress reliever to put a little fun in filing.

Junior Ad Pop Lollipop: Leave a receipt, take a lollipop! Get team members in on the tax prep paperwork with small incentives that replace “stress” with “sweet” when they hear the word “taxes”.

Here’s to feeling high on filing and low on stress this tax season.

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