Wednesday, 12 March 2014

Tax Solutions For Small Businesses

A small business owner should think about his or her taxes before the business grows too large. When tax season comes, there are many things to think about and options to consider. When leaving this to chance or ignoring it for a while, an entrepreneur will waste an excellent opportunity to develop a viable and workable long-term tax solution. With that being said, here are a few things to consider when thinking about tax solutions for your small business.

tax seasonContract out the work: If you run a small, one man firm, you will probably want to save money and avoid hiring a professional to do your taxes. This may or may not be a good idea based on your circumstances. For instance, if you are a web developer and run a simple company, you can probably use programs or a website to file your taxes. This is certainly true if you do not have employees, worry about an office location or depreciate items. On the other hand, if you run a larger firm with a lot of employees and inventory, you must hire an accountant who can help you develop a workable system. Furthermore, if your business is large and established, you should consider paying a CPA to file on your behalf. Without a doubt, when hiring a professional, you can avoid common pitfalls with the IRS.

Find a good company: It is beneficial to find a solid accountant who can do a great job. Start by asking other small business owners if they have an accountant they would recommend. Usually, when this is the case, a fellow entrepreneur will have no trouble sharing this information. Not only that, when looking for a person to help you with your business, you should consider going to a few local small business meetings or conferences. With this, you can talk to dozens of business owners about the situation. Most importantly, come prepared and ask a lot of questions. On the other hand, it will require more work for you to find a qualified and hardworking CPA. Simply put, most will work in a particular area of expertise. For example, some CPA firms do real estate while others work for farms. For this reason, it is wise to speak with a lawyer who can help you find the right CPA for your business.

Study each program:
As mentioned, some people will run a small company and will want to do their own taxes. One easy and simple way to do this is to use an Excel spreadsheet. If you work as an independent contractor and run a small corporation, you will not need a lot more. Of course, if you buy equipment, pay contractors and employees and sell products, you will need a program. Many consider TurboTax or one of the many other available programs. When looking for the right software for your needs, you should think of the features that you desire. Not only that, you should think of the day-to-day bookkeeping as some software makers offer a better user experience. Either way, if you want to take your own route and save money by not hiring a professional, you should take a long and hard look at multiple software options.

Without a doubt, when running a company, you must worry about the tax implications from day one. Furthermore, you need to develop a long-term and practical strategy that will see you get the desired results. Otherwise, with one mistake, you can set yourself back for a long time. Finally, you must understand that it is hard to recover from accounting errors and issues. When this happens, a company will have to hire an auditor to go back and look at everything. For this reason, one must come up with a viable tax strategy.
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Amy Thomson writes about technology, career success, and education. When she’s not writing, she’s skydiving over the Rocky Mountains.

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