Small Company Tax Basics

December 16, 2018 | Tax Laws

Small Company Tax Basics

Being a small business owner is something that many people strive for and want to achieve, as they don’t want to rely on others and there is more potential in being a small business owner. Having your own business has many advantages but there are also many things you must be aware of and deal with. Small business tax problems is something that every business owner has to carefully manage and it is not always easy. There is more to business than just knowing your customers and products. Dealing with the payroll for your employees, managing your expenses and keeping all the local, state and federal tax information correct are the core of a successful business.

The tax laws are extremely complicated and they are even more complicated for business owners. Not only that, if you make one small error or miss something, there will be consequences (i.e. penalties). So it is always wise to invest some time into understanding and dealing with small business tax matters and not put in way back in your list of priorities.  There are essential steps a business owner must take and essential things a business owner must understand.

The Importance Of Organizing Your Files 

For many small business owners, the last few weeks that lead up to tax day are very hectic and often chaotic, because people do not keep their records and books in order the whole year round. When dealing with tax matters you simply can not “wing it“. You need to set up a filing system and find someone or train yourself to be the financial manager. This is a must for every business owner. It is an expense of being in business.

Every bill and receipt has to go to the right place.  Being organized will not only help you understand your own business better in the day-to-day activities, but if you plan to hire a professional tax consultant (CPA or tax attorney), it is very convenient to be organized and have everything in place to avoid any confusion and complications. It is even more important to be organized, because in an event of getting a tax audit by the IRS, you will have all the essential documentation organized. One really helpful tool for keeping yourself organized is business tax software.

Pay Close Attention To Your Payroll

Being a small business owner, means having responsibilities, like staying on top of your payroll. This means both the tax which is paid for employing every worker you have and the tax withholding from your employees. Very serious tax penalties can occur if for some reason you should fail to file payroll taxes. So there is not just one small business tax you need to deal with but several taxes, especially if you have employees. You can talk with a specialist of payroll tax resolutions if you fall behind on filing payroll taxes. Yet again, it is far easier and more convenient to have a business tax software to keep you on top of things. Knowing how to manage your time is key for a business owner.

Paperwork Is A Priority

Nobody likes to deal with paperwork and it is very tempting to ignore the paperwork and just not deal with it, but you know very well how important it is, particularly if you own a home based business. The important thing is also to deal with your small business tax in a timely fashion. If you miss an initial file date, you will accumulate back taxes or just be fined, neither one is a good option. If you do not manage to keep your back taxes under control, then your tax debt can quickly grow out of control. Investing into a business tax software can eliminate such worries very easily. All of such issues like wage garnishments, tax liens and other penalties can be avoided by paying the correct amount at the proper deadline or before the deadline. If this is all over your head then find someone who will keep your paperwork in check before it creates a financial nightmare.

Take Charge

It can be very frustrating, confusing, and stressful to deal with small business tax-related issues. But instead of ignoring the problem, the solution is to educate yourself and take charge of your own taxes to the extent you can. If you put in the effort to find all of your receipts, purchase a well-organized filing cabinet, and get organized, things will be much less stressful. If you get overwhelmed you should get help from tax professionals because they have the skills you may lack. Once you get organized and get the hang of it, you will find it very easy to file your taxes and run a successful business without any stress

Attorney Timothy Hart

Timothy S Hart, the founding partner of the tax law firm of Timothy S. Hart Law Group, P.C. is both a New York Tax Lawyer & Certified Public Accountant. His area of expertise includes innovative solutions to solve your Internal Revenue Service and New York State tax problems, including tax settlements through the Federal and New York State offer in compromise programs, filing unfiled tax returns, voluntary disclosures, tax audits, and criminal investigations. [ Attorney Bio ]