4 Tax Time Tips

It’s that time of year again. Tax time! Make it as simple as possible with these 4 tips.

1. Gather your forms and numbers as early as possible

Form 1099 is a required tax form that reports payments you make to vendors to the IRS. The basic guideline is that if you paid a vendor more than $600, you will need to issue them a form 1099 at the end of the year. If you use online payment software this will make your life much easier.

However, there are a few more rules, so check with an accountant if you are unsure whether you owe a vendor 1099.

2. Understand the tax credits you’re eligible for

Some of the best tax advice is to spend time searching for the tax credits your business is eligible for.

You can view a full list of business tax credits through the IRS. Some more common credits include the following:

• Credit for small employer health insurance premiums – If you provide health insurance to your employees

• Employer credit for paid and medical leave – If you offer paid familial leave to your employees

• Disabled access credit – If your business location is accessible to people with disabilities

• Retirement plans startup tax credit – You started a SEP, Simple IRA, or 401(k) for your employees

Tax credits may also apply to your personal taxes filed with a form 1040. It’s best to check with an accountant about this one.

3. Track and report all business tax deductions

For deductions like mileage and home office deductions, that require extra documentation, you have to be sure to track them properly.

For mileage, keep a log of any miles you drive. You’ll give this information to your accountant at the end of the year.

Be sure to track home expenses in one place, if you qualify for the home office deduction. This includes rent or depreciation (if you own your home), utilities, cleaning costs, repairs and maintenance, and pretty much any other expense that relates to your office space.

4. Invest in an all-in-one business software

The best tip for staying organized is to track everything in one place. If you’re using a lot of different software and spreadsheets, be sure to pull it all into one before you get started with your taxes this year.

First and foremost, you want to be tracking income and expenses. Income is any payments you receive. If you have sent someone an online invoice this needs to be listed and recorded properly. If you use an online invoice generator this is an easy way to keep on top of all invoices you’ve sent out.

For expenses, track all business expenses in one place and categorize these by type as well.

Having all this in one place will make it very easy to either fill out your tax forms or turn the information over to an accountant.

This article is intended for general educational purposes based on generalizations for specific questions you should consult an accountant.

I write about the tools of crms to help other small businesses and freelancers who are getting started themselves or just want to gain more knowledge. I hope that the information I provide helps you grow your business!