Taxes. No other word sends shivers down a small business owner’s spine or gives them such a sense of dread; but it doesn’t have to be.
There is help available to put together sensible strategies, so you don’t dread all the quarterly payments and keep more of your money.
On the Small Business Radio Show this week, Spencer Carroll, an experienced CPA at Gelt, discussed fourth quarter strategies. He is also a financial advisor and owns a small real estate business. His accounting background and passion for business were the perfect combination for Gelt, where he leads the sales team and helps clients maximize their taxes.
Fear of Taxes
Here’s what Carroll had to offer small business owners in the way of tax advice…
Understanding Fear
Carroll explains that the fear of environmental taxes often stems from viewing them as an expense or liability. This view leads to resistance to parting with hard-earned money. Many business owners focus on growth and customer satisfaction, often neglecting back office tasks such as bookkeeping and compliance, which are essential to smooth tax preparation.
Fear of the Unknown
Barry adds that fear of the unknown plays a big role. When business owners fail to keep track of their tax liabilities throughout the year, they often face unpleasant surprises at tax time, leading to financial stress.
Best Practices for Tax Administration
To alleviate this fear, Spencer Carroll outlines several best practices for small business owners:
Maintain Accurate Bookkeeping
Importance: Clean and accurate financial statements are essential to successful tax planning.
Practical Tips: Invest in reliable accounting software and consider hiring a professional bookkeeper to ensure your records are up-to-date and organized.
Regular Check-ins with Your CPA
Importance: Ongoing communication with a CPA allows for better planning and strategic decisions that can impact tax liabilities.
Practical Tips: Schedule quarterly meetings with your CPA to review finances, discuss estimated tax payments, and explore potential tax savings opportunities.
Different Business and Personal Finance
Importance: Keeping business and personal expenses separate simplifies tax filing and protects the legal structure of the business.
Practical Tips: Open separate bank accounts and credit cards for business items to maintain clear boundaries between personal and business finances.
Understanding Deductions
Importance: Knowing what qualifies as a deductible expense can significantly reduce tax liabilities.
Practical Tips: Familiarize yourself with common business deductions, such as office supplies, travel expenses, and home office deductions. Consult your CPA to ensure compliance with IRS guidelines.
Listen to the entire episode on The Small Business Radio Show
