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Back in the spring you may have realized you were running out of time to file your tax paperwork. Instead of freaking out and rushing everything, you very sensibly exercised your right to file a tax extension. This gave you six more months to figure everything out and get all your ducks in a row. After all, you wanted to save as much money as you can on it.
However, since you’re a sensible business owner, you may have noticed that it’s extremely close to October 15th, the tax extension filing deadline. Uh oh - that means it’s time to get your tax rear in gear! Remember when you filed for the extension you had to pay an estimate of what you owed as the extension only works for your actual paperwork. When all is said and done you may end up paying more or even getting some money back.
1. System That Works for You
Let’s get real for a second: if you’re just now getting your taxes together after having six more months of time something needs to be done. One thing that may be holding you back is your organizational system; if you can’t find anything you need, you’re more likely to put it off until a later date simply because it’s more of a hassle.
However, you can only hear “get your stuff organized” so many times before you shut down completely. In the end, your system has to work for you. Are you trying to be TOO organized for your usually chaotic self? That may be your problem – try something a little more abstract and see if that keeps you up to speed.
Also, this system needs to work for you year round. Small business owners deal with a lot of taxes and you must stay on top of them lest they take over your life. Once you find a system that works for you, maintain it so you never have to play “catch up” again.
2. Understand Your Deductions
Every dollar in your small business counts. You’d never throw money away. But that’s exactly what you’re doing when you don’t take every deduction you possibly can on your taxes. Understand what you’re able to deduct is vital to keeping your money in your business so you can grow.
There are two really big ones most small businesses miss: gas/mileage and the home office. Gas is missed because many owners don’t think they travel very much. However, if you add up all the miles you’ve traveled to the post office, store, conventions, etc. you may be surprised how far you’ve actually gone!
As for the home office deduction, all you have to do is make sure your office space is solely used for that purpose. So if you have a hall closet as your office space and don’t store other stuff there, you’re good. Your kitchen table or an office/guest bedroom doesn’t count, though. Ask a tax expert before filing if you have any trepidation about taking a particular deduction.
3. Consider Going Digital
Although like we said it’s important to get your own system going, you still should consider that the world is moving towards the digital and cloud age at a rapid pace. It’s not just because it’s the new, hip thing to do; the cloud movement has saved businesses enormous amounts of time and money over the years and will continue to do so.
So if you need help with your finances, for example, don’t be afraid to sign up for GoDaddy Online Bookkeeping. And instead of worrying about paper receipts and invoices cluttering up your closets, digitize them or send them to Shoeboxed to help you out.
These and other cloud-based services can make tax time a simple time.
Did you file a tax extension this year? Have you filed your taxes yet?