April 15th is around the corner and for those of us entrepreneurs who haven’t yet, but plan to file as a sole proprietor, we better get going. It’s estimated that the average American spends 25 hours preparing taxes (according to the U.S. government). Most people use this time to evaluate expenses and income determining strategies for the years ahead. Over the next few weeks, I’ll provide some tips on how to negotiate with business service providers so as an entrepreneur, you are managing costs. In the meantime, here are a few words of wisdom to help you prepare your taxes for next year.
Manage your records: Keep detailed records of payment and sales using a standardized system. If you own an online store, purchasing POS system software will help you with accurate records of inventory, sales, and profits without a stack of papers.
Outsource a payroll company: As an entrepreneur and mother, you have plenty of responsibilities already on your plate. Payroll services typically perform all of the year-round work for you keeping records of your hired contractors and any employee status while informing you of any tax law changes that might affect your business. I firmly stand by the motto that if I can hire someone to do the service and it saves me time to spend on growing my business or being with family, why wouldn’t I?
You don’t have to prepare your taxes alone: A payroll services provider may or may not provide accounting services. If they don’t, enlist the help of an accountant. It doesn’t have to cost you an arm and leg especially in this economy when many accountants are freelancing services to make additional income. An accountant will tell you what equipment you can purchase to get a write-off (especially right now with the new Stimulus Plan in place) and which purchases you should hold off on. Mostly though, an accountant makes sure you have your financial records in order and accurate.
You can always get an extension: Don’t rush to get your taxes done if you aren’t ready. Just download IRS form 4868 and request an extension. If you overpay on any taxes you owe by the deadline, you’ll get a refund once you file your return. Just make sure you pay any taxes you owe to avoid fees and penalties.
Lastly, if you’ve already filed this year and learn about extra tax savings or liabilities, you can amend a tax return.
About the author:
Betsy Brottlund is the Director of Marketing at Resource Nation, an online resource that provides expert advice on purchasing and outsourcing decisions from payroll services to phone systems for entrepreneurs and business owners. She frequently contributes to several sites that offer tools and advice for entrepreneurs, including Dell and BizEquity. Previously a communications consultant, Brottlund has worked with start-ups to Fortune 500 companies managing their marketing and communication programs.
Resource Nation provides tools to help start and grow your business and are used on other online business communities such as Entrepreneur.com, StartUpNation.com, and Ladies Who Launch.
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