HY Accounting Blog

5 Tips for How to Prepare Taxes for Small Business

Taxes can be a complicated mess, but if you spend some time and prepare yourself to do your taxes as a small business owner, it will not seem so difficult. If you are looking for how to prepare taxes for small businesses, we have five tips that will help get this process started.

Tip One: Be organized

Keep any documents related to your business in one place, be it physical or digital! You can have as many different places for your important files as you won’t – make sure that they are all accessible.

  • Make this a habit and keep everything together so when tax time comes around next year, it will take much less effort on your part to find what is needed.
  • Use a document management system like Dropbox, Google Drive, or iCloud if these tools work better for how you operate best.
  • Scan receipts into your smartphone using apps such as Dext

Tip Two: Save All Receipts and Paperwork

This is pretty basic, but how do you prepare taxes for your small businesses without all of your documents? It would be nearly impossible. Ensure that you are printing out receipts from various expenses before they get thrown away or lost among the mess of paperwork on your desk. And keep track of any paperwork related to how much money has been made through sales! There will also need to be how much money was spent during the year to complete this process accurately.

Tip Three: Create a Spreadsheet To Track Income and Expenses

As mentioned above, it can be tricky with how many pieces there are, just trying to figure out how much income has been made by what company and how much money has been spent on what. Create a spreadsheet to keep track of the income and expenses for each company, how they are related, and how many months this applies to. This will give you an accurate idea of how profitable your small business is to make any taxes or otherwise go forward with it!

Tip Four: Get A Tax Professional

This one may seem obvious (and maybe even unnecessary), but how do you prepare your taxes if you don’t know anything about tax preparation? Hiring someone that specializes in taxation can take out all of the guesswork as well as make sure that things are done correctly from start to finish – which any small business wants!

Tip Five: Set Aside Time To Complete The Taxes

The tax preparation process can be long, daunting and overwhelming if done alone. So many different things need to be done and accounted for to ensure that everything is accurate! Set aside time regularly to take the stress away at Tax Time.

Trust us – if there’s anything you don’t want on this list, it would be stressing over filing at the last minute with incomplete documentation!