5 tips to make filing your business taxes less taxing
It’s easier than you think to get ahead of tax season.
Gathering invoices and bank statements, identifying eligible business expenses and putting together a detailed earnings report may seem a bit daunting — especially when you spend most waking hours running your business.
By investing some time upfront and following these simple tips, you can avoid the scramble and make the weeks leading up to Tax Day a lot less stressful.
1. Maintain good business records
If you’re like many business owners, you probably have a catch-all box for business receipts and other papers that you’ll get to “one day.” And that day is typically sometime in April when you’re trying to reconcile all your business expenses for tax purposes. But by organizing these receipts every month — or every day if you’re a real go-getter — you can help make the tax preparation process much smoother.
If you have yet to tackle this project for your 2021 expenses, it’s not too late. There’s still time to get organized for the upcoming tax season. Carefully consider all eligible deductions, and be sure to track all your income and expenses for the year — especially if you’re self-employed.
2. Separate business and personal expenses
You’re a business owner, but you’re also a consumer. So it’s understandable that you may sometimes combine your shopping trips. Just remember to separate your transactions and receipts for business and personal purchases as you go to streamline the process and avoid any confusion or red flags come tax time.
A designated business credit card, like a Chase Ink® business credit card, can track all business purchases for the year and help manage your cash flow. With Chase Ink, you can also integrate your credit card account with your accounting software so you can simply print a year-end statement of all your business purchases. And you can request additional cards for your employees at no additional cost, making it easier to track spending across the entire organization.
3. Take advantage of online tools
Having an accountant handle your tax preparation can save time and ensure you receive any qualifying deductions. However, you’ll still need to supply your accountant with employee, expense and sales information, which can be rather tedious, depending on your organizational skills. Chase offers a number of digital business tools that can make tax time a more seamless experience.
With the Chase mobile app, business customers can create and manage digital receipts and add their accountant as an authorized user to their Chase accounts. This enables tax professionals to safely access, download and export all business transactions or directly connect the account with leading accounting software so they have all the information they need.
4. Mark your calendar
The tax deadline is April 18 for most households and businesses, including sole proprietorships, LLCs and corporations with a fiscal year ending December 31. While the IRS extended the deadline for the past two years, it’s not expected to do so again this year. If you need more time, you can file for an extension with the IRS. However, any payments owed will still be due by the original date. Speak with your accountant or tax consultant for more information about filing an extension.
5. Prepare to prepare your taxes
Making your life less stressful is only one reason to start early and take the time to carefully gather and organize everything you need to file your taxes. The other reasons are being sure you include any expenses or deductions that could reduce your taxes and avoiding mistakes that could lead to audits and penalties. Filing your taxes is necessary, but with a little planning and preparation, it doesn’t have to be painful.
Speak with a Chase business banker to learn more about the tools and products that can help you prepare for tax season this year and beyond.