I know that talking taxes is often the last thing you want to do, but it’s incredibly important for the welfare of your business. When it comes to submitting tax returns, the process can be simplified by doing the right things ahead of time. If you leave everything until the last minute and find yourself in a panic, you’re going to struggle. Unfortunately, bad tax management can lead to huge fines and a damaged reputation. These are the mistakes you’ll need to avoid.
Failing To Track Expenses
If you’re new to the whole idea of understanding taxes, you can’t afford to make this mistake early on. Keep in mind that your new business venture will require all sorts of expenses. You’ll need to keep a close track of them as you go throughout the year. Why? When it comes to doing your return, you’re going to want to claim for them as a deduction. If you haven’t got all that information to hand, you’ll end up making the task much harder for yourself.
Throwing Away Your Receipts
That brings us onto our next point. If you’re the sort of person that struggles with organisation, you’re going to have a tough task on your hands. You need to keep your receipts in case you’re required to provide evidence. If you want to deduct certain things from your expenses, you might have to prove it. If you’ve thrown that proof away, you’re going to have a tough job on your hands!
Not Investing In Software
So, how can you start becoming more organised with your taxes? Business software is one way. There are loads of software options for small businesses on the market such as Sage. You’ll need suitable training in order to operate them, however, as they’re not simple! Also, you’ll find that the cloud is becoming more prominent in recent years for software use. For example, some companies offer services to calculate small business finances via cloud computing.
Failing To Utilise Accountants
If you’re jumping head first into the complicated world of taxes, you’re going to struggle. It isn’t supposed to be easy! If you haven’t got a dedicated accountant and you’re doing it all yourself, it’s even harder. You could outsource this responsibility to accountants like Raffingers as a way of seeking assistance. Outsourcing your accountancy needs is one surefire way of avoiding tax penalties and fines. It also helps to take the task out of your hands!
Mixing Personal & Business Finances
I know what it’s like when you start a new business. It’s hectic, and financial dealings can easily become mixed up. Before you know it, you’re mixing your personal and your business finances together, and that causes confusion. In terms of tax, this can actually lead to legal infractions in particularly bad cases if you’re not doing things the right way. If you want to avoid confusion when doing your taxes (you do!), then separating the two accounts is crucial.
Are you making any of these mistakes? Put a stop to them!
This article was provided by ellie jo