It’s no surprise that most people don’t enjoy filing their tax returns, yet, it’s a fact of life. As the saying goes, “two things are certain – death and taxes.”
For entrepreneurs, taxes can seem even more imposing, but that doesn’t have to be the case, say financial experts. In fact, the sooner you accept that taxes are a reality and that keeping accurate records will save you a lot of anxiety, and possibly money, the better off you’ll be.
The fear surrounding taxes is understandable, especially for young business owners who typically have less experience and knowledge with regard to tax planning and are put off by the complex tax code and seemingly overwhelming paperwork associated with it. Still, once you put a plan in place – and follow it – you’ll be happy you did.
So, here are some recommended tips from tax experts to help get you started on a fresh path to freedom from tax stress.
- Have an organized recording system for your expenses. Technology will be your friend with apps such as Expensify. Free for individuals, it lets you photograph your receipts and log expenses while you’re traveling.
- Look for ways to lower your taxable income by using deductions for your home office, contributing to tax-deferred retirement accounts and exploring health savings accounts for healthcare expenses.
- Don’t forget to file quarterly tax estimates. Be certain they are as accurate as possible. To better understand just what the IRS requires, visit irs.gov and estimated tax for individuals, where you can find detailed information. Or contact your tax advisor at Diamond & Associates for help.
Some financial planning experts suggest that entrepreneurs defer money too, using 401 (k) plans, IRAs and depreciating real estate. Gifting appreciated stock to someone in the zero capital gains tax bracket can also be useful in some cases.
It’s always wise to consult with experts, such as CPAs, tax attorneys, estate lawyers and insurance specialists, as needed. Our team is more than happy to review your tax status and make recommendations to help you manage your business and financial planning.
Regardless of your particular business, you will feel better when you take control of your tax planning.