3 Ways Small Business Tax Preparation Saves You Money
One of the first rules of starting a small business is to learn how to save money.
However, with all the costs that come with a new business venture, it’s easy to throw this rule out the window without realizing it.
Unexpected expenses and setbacks are a normal occurrence for the first few years, but they cost time and money. And when small business owners of Toronto start their tax preparation, they may be in for a bit of a shock.
If you’re a small business owner, you can easily avoid this issue and save yourself a lot of money by simply practicing a bit of collaboration and organization.
Taxes don’t need to be a subject of doom and gloom. In fact, with the right tactics, you can receive a sizable refund from your tax return. Here are three ways small business tax preparation can actually save you money.
Work with a trained accountant
Most people have a hard time managing tax preparation, much less handling their accounting throughout the year. That’s why it’s important to work with a trained accountant. An accountant will organize your bookkeeping and tell you what to keep in mind throughout the year (not just at tax time.) They also will support you when you’re filing your small business taxes, which reduces the chance of liability. And if the IRS audits your small business, an accountant can help you during the process to ensure you’re taken care of. This kind of forethought will save you a lot of time and money throughout the year.
Continually track receipts and records
Much like the saying, “a stitch in time saves nine,” you should always keep track of your receipts throughout the year. Make a note of ongoing expenses and one-off purchases to have a better grasp of your profit and loss. And if you work with an accountant, they will ensure this doesn’t fall by the wayside. This paper trail will also help when it comes time to file for deductions or credits at tax time.
Actively look for deductions
There are plenty of deductions your small business can benefit from. However, some people don’t know what potential deductions to look for. And these deductions may differ or vary depending on your business or industry. Take time to identify deductions and credits throughout the year, so you are more likely to get a refund when you file your taxes. Discuss these with your accountant to ensure you apply for all potential credits.
While these three steps may seem simple, they aren’t always easy. It’s challenging to track receipts, especially during a busy season. And keeping an eye out for new potential deductions takes time and patience. However, if you work with a seasoned accountant, they will do most of the heavy lifting for you.
Curious about small business accounting? Sign up for a free consultation with Leonard Tam to discuss your small business accounting needs. We’d be happy to address any questions or concerns you may have so that you can manage your small business confidently.