first time business owner, what to ask your tax consultant

As a small business concern owner, tax flavour can exist 1 of the most challenging and frustrating times of the twelvemonth. Since you're probably not an expert on the revenue enhancement code, it tin can be stressful to file your taxes properly and have all the deductions available to you lot.

With the April xv revenue enhancement-filing deadline quickly approaching, Business organisation News Daily spoke with several tax and pocket-size business concern experts almost some of the biggest mistakes made when filing taxes, what deductions shouldn't be overlooked and how modest business owners tin can commencement preparing now for adjacent yr's tax-filing catamenia.

Related: Interested in business tax software? Bank check out our best picks.

We talked with Barbara Anderson, manager of product marketing for the online invoicing, accounting and billing software provider FreshBooks; Helena Swyter, a practicing accountant for creative professionals at Sweeter CPA; and Kristel Yoneda, a Los Angeles-based freelance writer and marketing consultant.

BND : What are the biggest tax mistakes pocket-sized business organisation owners make? :

Anderson: Being a small business owner is tough. At that place are and so many demands on your time and so many hats you are required to vesture. Often, the administrative or bookkeeping work gets put on concur or delayed so that yous can focus on your customers or concern. I such affair that gets shuffled to the side is keeping runway of receipts or expenses.

They'll be left on your desk, in your auto or possibly fifty-fifty in a shoebox. At revenue enhancement time, this becomes an event, because yous're missing expenses (and, therefore, cannot claim them equally deductions), or you have to sit downward and do them all at once, which takes lots of time abroad from your business. Business owners are meliorate off automatically inputting and categorizing expenses into a unmarried repository every bit soon as they can. This all-time reduces the take chances of missing a deduction.

Swyter: Most of the problems and frustration I run into on the role of the pocket-size business owner is when he or she has been commingling business organization and personal funds throughout the year and now has to dig back through banking concern accounts to straighten things out. Information technology's important for entrepreneurs to establish a business bank account and to apply that account strictly for business transactions. Get in the addiction of paying for personal expenses with personal debit or credit cards, to avoid extra work at tax time.

Yoneda: I think many small business organization owners are unaware of the different tax deductions available to them. As pocket-size business owners, we are responsible for paying a pretty hefty percentage of our earnings toward taxes, but in that location are also many deductions that can help offset the fiscal burden. You only take to practise your research or rent a professional to handle your taxes.

Another big error is not keeping meticulous records of your business expenses. Some people who run their business every bit a sole proprietorship assume they can just dig around for their receipts when revenue enhancement season comes, but I clinch you that'll be a bigger source of stress than keeping updated records of your purchases and expenses throughout the twelvemonth.

BND: Is it e'er a good idea for modest business concern owners to do their ain taxes?

Yoneda: I personally prefer to let a professional handle my taxes. Filing my taxes used to requite me a headache, and I was always afraid of doing the forms incorrectly — so at present I just let a tax professional person accept intendance of it. This was especially helpful when I moved from Hawaii to California a few years ago and had to annals my business in Los Angeles. My tax expert helps me maximize my deductions, fills out all the necessary paperwork and even reminds me to pay my estimated taxes on time. This kind of assistance is invaluable. It allows me to focus my energy on producing quality piece of work for my clients rather than stressing out about my taxes.

BND: If business owners ever exercise their ain taxes, what are some primal things to remember?

Anderson: It's always easiest to gear up and file your taxes when you have all of the information right in front of you. Keeping track of your income and expenses yr-round in a software solution is a nifty manner to reduce your headaches at tax time. Your info is all there in one place and pre-categorized, and information technology tin can exist hands transferred to your taxation software.

BND: Are in that location any tax-lawmaking changes this year that pocket-size business owners should be aware of?

Swyter: The biggest alter for small business organization owners is that those who maintain home offices can use the simplified option to summate the deduction for 2013. In the past, people who worked from home had to rails various utilities and expenses pertaining to maintaining a abode function, like heating, hire, maintenance, etc. For 2013, taxpayers are able to take a standard deduction of $v per square pes of home used for business (up to 300 foursquare anxiety). This profoundly eases the burden on taxpayers trying to calculate the dwelling office deduction.

BND: What are the deductions small business owners most often overlook?

Swyter: Small business organisation owners often overlook the mileage deduction. It'south worth tracking car trips — other than your standard commute — every bit you can deduct 55.5 cents a mile for 2013.

I also encourage clients to keep track of educational expenses, such as books, grooming seminars or online courses. If these items help yous strop your skills as a business organisation owner, they may exist deductible.

Additionally, I notice that people often forget virtually purchases fabricated with greenbacks because, unless they've held onto a receipt, they are likely to forget about the purchase entirely. Either use a business credit or debit card more regularly or establish a system to record cash expenses.

Yoneda: I think these deductions will vary by field, but as a freelance writer, it never occurred to me that I could claim business expenses such as Web hosting, relevant publications and magazine subscriptions, and even part of my monthly Internet pecker. Separately, these are all pretty small expenses, but they do add up over the form of the year.

BND: What tin small-scale concern owners practise throughout the residue of this year to make next year'southward taxation filing an easier process?

Anderson: The most important thing to do throughout the year is to keep track of your income and expenses in an accounting solution. This will non but help you stay on elevation of your business concern mean solar day-to-solar day, but it will as well make sure taxation time is like shooting fish in a barrel and painless.

There are numerous mobile apps that can help you easily rails expenses, fourth dimension, invoices, etc. Using mobile solutions means you lot don't have to scramble when compiling your expenses and time from one month to the next, especially when tax season rolls effectually.

Yoneda: Once taxes are filed, information technology'south a good idea to reflect on whatsoever items or issues that made the 2013 tax return burdensome. Were yous unsure of total income? Was it difficult to categorize expenses? Consider bookkeeping software that will assist yous with that throughout the yr.

Chad Brooks is a writer and editor with more than 20 years of media of experience. He has been with Business concern News Daily and business.com for the past decade, having written and edited content focused specifically on small businesses and entrepreneurship. Chad spearheads coverage of pocket-sized business communication services, including business phone systems, video conferencing services and briefing call solutions. His work has appeared on The Huffington Post, CNBC.com, FoxBusiness.com, Live Science, IT Tech News Daily, Tech News Daily, Security News Daily and Laptop Mag. Chad'due south commencement book, How to Start a Home-Based App Evolution Business, was published in 2014.

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