It’s almost time to file your taxes. And while Thumbtack can help you with a lot of things — including finding and scheduling new customers — we leave taxes to the experts.
Luckily, there are lots of tax experts on Thumbtack who can help, because with this year’s new tax bill just signed, there’s a lot to consider. We asked Top Pro Sandra Chessmore, a tax expert in Colorado, for her top tips for small businesses this tax season.
Tip 1: Avoid filing late – it will cost you.
Missing the deadline to file your taxes can cost you — a lot. Whether you’re due for a refund or late on money owed back to the government, late filing can mean penalties and dollars lost.
“Most people don’t understand that if they don’t file their returns in a timely manner they are risking a refund, if they had one. If you are not due a refund and owe money to the IRS you will have two penalties when it comes to late filing a tax return with the IRS. Failure to pay and failure to file. If you haven’t filed your 2014 tax return by April 17, 2018 you will not get a refund, even if you’re due one. Always file your return within three years of the return due date to receive a refund,” says Sandra.
Do it right: Find all the information you need to file your taxes on time — and learn the penalties if you don’t — on the IRS website.
Tip 2: Get your paperwork done early.
April 1 is not the time to start worrying your employees’ tax documentation. Give your employees and contractors the time they need to get their own books in order, by sending paperwork out early in the year.
“Small business owners should be getting their own year-end stuff completed, so they can get W2 and 1099 forms to their employees and independent contractors before tax season comes to a close,” says Sandra.
Do it right: A lot of things are changing this tax season. Visit the IRS’s small business and self-employment center to stay up to date on policies affecting your business.
Tip 3: Got a home office? Deduct it.
More than 50 percent of businesses in the U.S. are run from home, and if you meet the requirements, it means you can deduct a portion of home expenses, including mortgage interest, rent, insurance and utilities. If you have a space in your home that is used exclusively for business-related activity, there’s a good chance you can deduct it. Just know that the room cannot perform double duty, like as a guest room or playroom.
Do it right: Consult a tax pro to understand what the new deductions policy might mean for your business. And do it soon so you don’t miss out on refunds you’re still eligible for.
Tax details to keep in mind all year.
Here are a few more ways to stay ahead of your taxes all year round.
- Keep track of your mileage. Download an app that tracks mileage driven for work, charitable work, and medical reasons. If you’re audited, you’ll have everything you need to show the IRS.
- Set a calendar alert. Set aside money for taxes in a separate account and set calendar alerts so you know when estimated taxes are due.
- Scan your receipts: Save receipts and invoices, and use software to record income and expenses.
For more business tips, check out these 5 ways to kickstart your business this January.