Looking Ahead to Next Year’s Deadline: How to Make Tax Filing Less Taxing

The Brewster Chamber of Commerce Cape Cod is a great starting place for any small business owner. Whether you’re in search of networking opportunities, local events or advice, let the Chamber be your one-stop shop!

Managing invoices, taxes, payroll, and other accounting functions is all part of small business ownership. Keeping accurate records and ensuring you are up-to-date on the latest tax matters can help foster smooth financial processes and limit headaches come tax time. If you aren’t comfortable juggling these tedious tasks yourself, consider investing in expert professional help to avoid potentially messy financial mistakes.

Read on for other ways to lessen the stress that comes with filing. 

Business Plan Development

A well-thought-out business plan can help ensure your business operates in a highly functional way, along with smart money management strategies. This is particularly important if you’re utilizing small business loans. A solid business plan helps you analyze your market and make informed projections and decisions in both the short and long term. A business plan will also help you recognize where to best allocate financial resources and devise a strategy for ensuring you have reserves in place should the market slow down or if you encounter unanticipated circumstances or events.

Money Management Tips

An accountant, money manager, or small business banking expert can set you up with an accounting system that makes the most sense for your business. Depending on the type of operation you run, careful tracking of expenditures will be important, and knowing the types of tax incentives and rebates that might apply to your operation will help reduce your tax burden. Small business money and tax management can be time-consuming and potentially distract you from running the more salient elements of your business. This is where Achegust & Associates can be an invaluable asset.

Employees Versus Contractors

Many small business owners find it is more cost-effective to hire independent contractors than full-time employees. Some small businesses have a mix of both types of workers. According to TechRepublic, to ensure you are classifying your staff appropriately, keep in mind that a full-time employee is seen as one who plays a central or fundamental role in business operations, whereas an independent contractor is one who works on a strictly casual basis — you don’t pay them benefits or withhold taxes, but you do issue them 1099s each year. 

The U.S. Internal Revenue has recently adjusted the 1099-NEC form for non-employee compensation and the form for miscellaneous compensation, so be mindful about using the appropriate forms. Depending on how complex your business is and how comfortable you are with money management and staying on top of tax law, you may find it beneficial to use tools that allow you to efile 1099 forms. Aside from electronic filing, this is the best way to avoid filing mistakes, missed deadlines, and the guesswork that goes with being in unfamiliar territory. In turn, this can significantly reduce the potential for running into any tax-related headaches.

Managing Financial Stress

Small businesses often operate on a tight budget with slim profit margins, and as such, unexpected expenses, a slow economy, or a downturn in business can result in financial stress. Making wise budget choices for your business — including monitoring the market, cutting expenses wherever possible, and having cash reserves — will all help ensure that your small business weathers any financial storms that come along. 

Consider your business plan to be a living, working document that you constantly reference and update as circumstances dictate. This will help you identify trends and recognize potential financial concerns before they get out of hand. Being an entrepreneur means being flexible and able to pivot as necessary to keep your business up and running.

Smart financial management and careful tax preparation helps your business remain operational and profitable. It can also reduce the potential for personal stress that can arise from being a small business owner.