When starting up a small business—whether it is ecommerce, service-based, freelancing, etc—what owners worry about more than almost anything is taxes.
No one is an expert in all areas of a business, from accounting to sales, or HR to finance. It’s no secret that many small business owners are reluctant, even resistant, to hiring outside professionals. For some it’s a matter of pride, for others it’s an issue of finances, and for a few, ignorance is the culprit.
Don’t let any of these stop you from getting help in areas that are not your specialties. In the end, it will save you much more than it will cost. Unless you consider an unscheduled dance with the IRS a good time—and being unorganized can almost guarantee the IRS will whisk you into a slow dance.
Experts agree on a variety of tips for small business owners.
Ignoring Those Pesky Details Can Cause Migraines
Who wouldn’t prefer financial freedom over a migraine? Several suggestions can help you feel confident in the way your business is run and its ability to not only afford expenses, but pay you well, rewarding you for all those 14 hour days and working weekends.
When starting a business, make sure to choose the right business structure, whether a sole proprietorship, an LLC, or a corporation, and don’t forget to open separate business accounts, as comingling business and personal finances complicates things if you need to prove legitimate business expenses.
Other items to consider include hiring independent contractors, using form 1099, and setting up a retirement plan for that time when you are hiring employees, and not just contractors.
Keep Good Records
Keeping good records all along the way can save you a great deal of time and frustration later, especially when tax time approaches. This should include setting up a filing system for all important documents, contracts, and receipts.
Record keeping with the use of software is also critical and can be done inexpensively. The most important include accounting software to track revenue and expenses and payroll tax software. Getting payroll taxes wrong can result in penalties from the IRS, and, unfortunately, too many small businesses experience this every year.
Hire the Right CPA
Hiring the right CPA is critical for a variety of reasons, but the most compelling is their help with not only filing your taxes accurately and on-time, but helping you to understand what can and can’t be deducted, such as business-related meals, deciding which way to go on the auto deduction, and having them explain what bonus depreciation includes.
They will also help with paying estimated taxes and can explain why cash payments from customers are not tax free, but taxed at the same rate as all others and must be claimed.
These professionals are in your corner, and will save you countless hours, frustration and headaches. That leaves you free to do what you do best–develop new products, decide on a marketing strategy, and acquire new clients.
Klein Hall CPAs have the experience behind them to advise you on all of these topics and more. Get in touch and find out exactly how they can make life, and business, easy for you.