Alright, so you’re raking in the money with your awesome product, and your recently named startup is progressing well! Now…it’s time for Uncle Sam to get his cut.
Keeping up with your finances is equally important for organization and tax purposes. Having all of your tax information in order requires detail and concerted effort; however, you can save yourself many headaches by staying on top of your money now.
The easy part of this is simply keeping up with all of your income and expenses. Log every sale you make or revenue from every event you sell at, and record every purchase you make for the business. You could pay for extensive organizational software, but it is also perfectly alright to keep track of it yourself as long as your business is operating on a small scale.
Another important aspect of small business taxes is knowing about how the process works in general. The IRS provides all of these details for you, and it is a lot of information to process.
You can file your taxes mostly on your own by using a service such as TurboTax, or you can hire an accountant to file your taxes for you. Either way, you need to understand your role and responsibility to ensure that this process continues to go smoothly (and you don’t go to jail for tax fraud).
When keeping up with your income and expenses, it’s convenient to already know what kind of expenses can be deducted from your taxes. Especially as a startup, there are many more deductions that I am able to make regarding Belltower Artisans’ taxes than I expected. Yet, at the same time, there are also a lot more taxes to pay than I realized.
Whether you are a naturally organized person or not, it is vital to stay on top on your finances from the very beginning. After reading more about small business taxes on the IRS website or from other tax services, what information did you learn that surprised you?