Small Business Tax Countdown: Must-Dos Before April 17

April 17 is right around the corner, which most likely means you are deep into getting your taxes in before the deadline. Small business taxes can be overwhelming, but they’re an unavoidable part of the entrepreneurial experience. Fortunately, with careful planning and the right preparation, the tax process can be straightforward and pain-free. I recently

April 17 is right around the corner, which most likely means you are deep into getting your taxes in before the deadline. Small business taxes can be overwhelming, but they’re an unavoidable part of the entrepreneurial experience. Fortunately, with careful planning and the right preparation, the tax process can be straightforward and pain-free.

I recently reached out to Juventino Gaytan, Christi Shields, Lynn Addison Gross, Ben Taylor and Becky Neilson – seasoned tax professionals and ProAdvisors from the Intuit QuickBooks community. With their input, here are five things you should do to best prepare for the tax deadline and maximize your returns:

1. Keep your records up-to-date.

Record-keeping is the single most critical part of the tax preparation process, since everything in your tax return must have the necessary supporting documentation. Keep records up-to-date and organized throughout the year – including receipts, bank and credit card statements, bills and invoices. Accounting programs like QuickBooks can help you track all types of business expenses. In whatever system you use to manage records, be sure to categorize all transactions by their type (i.e. “facilities,” “maintenance,” “travel,” etc.) so they report properly on your profit and loss statements. For transactions of $500 or more, recording the type of asset, date of purchase and price will help your tax preparer get you the proper deductions.

2. Look for a preparer with small business savvy.

Most small business owners choose to navigate the complicated world of taxes with the support of an accounting professional (bonus: accounting fees are tax deductible!). If you do decide to go with an expert, find a preparer with expertise in small business taxes.  What’s more, look for someone who has experience doing tax returns for your specific business type: LLC, S Corporation or C Corporation. A professional with regular experience in your specific area will be able to better help you maximize your deductions and assist with ongoing tax planning.

3. Stay in touch with your preparer throughout the year.

Once you have a professional on board, stay close with them throughout the year – not just in advance of big deadlines. Give them access to your bookkeeping system so that as business decisions are being made there is data to support that action. Maintain an open line of communication with your preparer and be sure to talk with them before making any big decisions like a purchase or lease. They’ll help you understand the tax implications, make informed decisions, and may be able to reduce your tax liabilities.

4. Don’t forget about quarterly taxes!

Most small businesses are required to pay estimated tax payments each quarter, since taxes such as Social Security aren’t being withheld from wages or other payments as they would for a W-2 employee. The IRS offers a helpful calendar tool for small business owners that sends reminder notifications one to two weeks before a payment is due. Because these deadlines roll around every four months, it’s important to set aside money on a regular basis to cover the payments and avoid interest payments or penalties.  Staying on top of this process is key, as come April you’ll have to be pay the balance of taxes if you did not pay quarterly. If you think your tax bill for 2017 will total more than $1,000 and your total withholdings are less than 90 percent of the total federal tax you expect to pay at the end of the year, the IRS will expect you to start paying your taxes quarterly rather than yearly.

5. Calculate your taxes in advance.  

Calculating your taxable income as a business owner early in the year will help prepare you for tax deadlines and avoid any surprises along the way. To do this, take your annual gross income-the total revenue you received-and deduct expenses, and any deductions you’re eligible for. This will give you an idea of the estimate for the taxes you’ll owe for the year (and when divided by four, the quarterly payments you’ll need to make). There are also plenty of online tools that can do this for you. This simple process will ensure you kick-off tax season more informed and better prepared to make the required payments.

April 17th is just around the corner, but there’s no reason to fear. Staying organized throughout the year, seeking the help of an expert, and anticipating deadlines and payments means you’ll be able to tackle tax season with the same tenacity that drives your business day-to-day.  

+++++

Originally posted to Inc. on March 7, 2018.

Written by Alex Chriss

Senior Vice President & Chief Product Officer of Small Business

Alex focuses on serving the global population of small businesses and self-employed businesses of one.

Alex has a proven track record of innovating inside Intuit -launching and leading Intuit’s self-employed business unit, as well as Intuit’s platform-as-a-service strategy and the QuickBooks App Store, all of which are thriving today. QuickBooks Self-Employed helps hundreds of thousands of self-employed individuals manage their expenses and tax obligations, the partner platform allows independent developers to create and deploy products that work in conjunction with QuickBooks, while the app store enables small businesses to discover and consume hundreds of apps that integrate with QuickBooks. He’s also led Intuit’s QuickBooks Financing business, providing lower rates, an easier application and faster delivery of capital to millions of small businesses.

Prior to Intuit, he was a successful entrepreneur, founding two companies, including CollegeWeb, an online community for college students that was sold in 1999.

Alex is a regular contributor for the Intuit blog, providing insightful content and commentary on small businesses and self-employed trends.