Owning a small business is a task in itself. It can be awfully stressful taking on the responsibility of working for yourself, but also very rewarding. One of the things that can make running a business daunting is doing your taxes when it comes to tax time. If you are new to being a small business owner, or if you have a small side hustle in which you have to report your earnings, there are things you should know about your taxes. Read on for some information to help you.
Hire a Professional Tax Service
Doing your own taxes as a small business owner, or as a self-employed individual can be a difficult task when you have no idea how to prepare your own taxes. You may not be aware of everything you can deduct, or you may not understand the tax laws as someone that is self-employed. This is why it's important to hire a tax professional. You want to lower your taxable income as much as possible and have as many deductions as you can, and a tax professional can help you accomplish this. If you have any doubt at all about doing your own taxes, you should hire a professional to help get your taxes done.
File Your Taxes Quarterly
If you make a lot of money in your small business or side gig, you should file your taxes quarterly. Not doing so could result in penalties put forth by the IRS, as you now owe them money and they don't like to wait until tax time for their money. The penalties can add up depending on how much you owe them, and setting up a quarterly filing may be in your best interest to save you some extra money.
Set Aside Money in Your Income
You should be saving some of your income each time you earn a payday, as this can help with those quarterly payments to the IRS. Not having to come up with a lump sum can be helpful and less stressful to come up with a large sum of money at once.
Keep Your Receipts
Keep a good record of your receipts and any purchase or cost that is possibly tax deductible. Keep receipts from lunch with clients, receipts for supplies, receipts for rent paid, for mileage or for gas. All of these things may be tax deductible if they are directly related to your business. Keep receipts and clear records of everything so preparing your taxes goes smoothly.
If you own a small business or have a side hustle and need to report your income to the IRS, you should hire tax preparation services to file your taxes for you.