Tax time means stress time- this rings especially true for small business owners.

Established businesses have tons of people looking after taxes, but startups and small businesses are still in the phase of holding their ground. They really can’t afford hiring so many people.

While many small businesses use professional accounting services, it is still frustrating because you haven’t prepared well in advance. But the exorbitant amount the tax may come up to will inspire you to take another path.

So, what can you really do to save on taxes? A number of things- here’s a bunch:

1. Get organized

This is the first thing you should do. But what should you organize?

All the paperwork, receipts and bank statements. You must know your expenses and file all the receipts including ATM withdrawal slips, deposit slips, and other transaction documentation, all in a single folder. This way you won’t miss any information required for proper tax filing.

A weekly or monthly routine will help you keep everything up-to-date and you won’t have to deal with 12 months of paperwork in one go!

2. Keep personal and business finances separate

Small business owners, especially those who operate from home, find it difficult to keep these funds separate. But this proves to be a huge trouble when filing for taxes.

It is important that you have a different bank account and credit card for your business. This will help you manage the accounts and organize the tax documentation. Plus, if an IRS auditor comes around, you need to have all the information correctly filed and documented.

3. Use accounting software

Spreadsheets are out of the window if you’re not familiar with accounting. No matter how good you are with numbers, accounting is a completely different thing.

Accounting software has made it easier to automate these processes. If all your tax revenue, expenses and other information is updated on software like QuickBooks, it will take only a few minutes for a professional accounting service to complete the tax filing for you.

4. Hire independent contractors

If you can’t afford to hire full-time employees, you can still hire contractors. However, you must know the difference between the two, so that you can follow all the regulations. This way, you won’t have to pay payroll taxes or benefits.

5. Make use of deductibles

If you’re taking a client to lunch, you can cut half of the cost as a tax deductible. If you’re renting a home, buying a property or using a car or an auto service for business, the associated costs can be deducted too.

If you want more advice, you can call us up for business solutions and strategies. Our tax and business consultancy services can help your business grow and file taxes in time.