Avoiding a tax time crunch

One thing all businesses must deal with is taxes. But taxes for a small business are more complicated than just doing your taxes at home - there are write-offs, special forms, and a wide range of things that need to be taken into consideration and can't be done at the last minute.

In order to avoid a tax time crunch, you should stay on top of your taxes and preparations all year long. This way, you will be prepared when the time comes. The following are some tips for helping you with your taxes so you can avoid the crunch.

Consider hiring an accountant
A good accountant can guide you in managing your finances and handling your taxes for you when the time comes, so you don't have to be worried with a tax time crunch. By doing research, asking for referrals, and conducting interviews, you can find a good accountant who will become invaluable to your business. Find an accountant familiar with the circumstances of your business; for example, if you have a business conducted primarily online, your accountant should be internet-savvy.

You can find a good accountant for managing your taxes and accounting in a number of ways. One is to ask for referrals. Business associates, friends, and referral services that can be found on the internet can be very helpful in finding a good accountant.

Use a budgeting software for businesses
You will need to have records of your finances and expenditures when tax time comes. If you are unorganized with this, you can face a world of problems. One of the most effective ways to track and manage your finances is through software. With charts, spreadsheets, bill pay reminders, and other handy features, money management software helps take the hassle out of budgeting and finances for many people and can help alleviate some of the apprehension that comes along with preparing your taxes.

There are a number of different types of budgeting software available today. Some of the most popular include Quicken and Microsoft Money. `

Know tax laws and requirements
In order to properly manage your taxes for your business, you will need to obtain from the IRS a federal Tax Identification Number, which you can apply for on the IRS' website. As far as taxes go, to give you a general idea, most likely you can expect the following:

Federal, state and local income taxes on your earnings from your business
Self-employment taxes (roughly 15.3 percent) on everything you've earned from over $400. These are paid quarterly.
You will also need to file Schedule C form (income or loss from a trade or business) with your Form 1040 each year you have your business

Business taxes can be complicated, so it's best to ask for advice from your accountant in order to properly file your taxes.

Keep track of your records
One of the most important things you will need to do for your home business is keep very detailed financial records. You should save all receipts for anything business-related, invoices, order forms, and anything else that may have to do with expenses for your business. Not only will this help you to keep track of your ingoing and outgoing expenses, but if you are audited, you will need all this information as well.

These tips will help to ensure you are well prepared when tax season comes.