As small businesses make preparations to file their 2017 taxes, here at Fluid Business Resources we wanted to spotlight what needs to be considered and what cannot be forgotten when it comes to tax season.
We hope you find this three-part, curated blog series beneficial as you prepare your own small business taxes. This post, “CALM DOWN: 4 Ways of Easing Stress While Tax Season Is In Full Swing” is part three of our three-part series.
Tax season is like a weather-related event. As soon as it dawns, stress comes in too like the wild winds.
If you feel stressed about tax season, know that you are not alone. Changing rules and regulations (see # 4) can cause stress, especially when what has finally become familiar is upended once again.
No matter if you take care of your taxes by yourself or you outsource your tax preparations to a professional, knowing how you can calm yourself matters. High stress levels often lead to oversights—corrections you wouldn’t be making if you could otherwise keep a level head.
To correct your tax-time jitters, remember these tips:
1. Get current. Be correct.
Throughout the calendar year, life events come and go. When it comes the employees who you employ and the contractors you work closely with, are you certain you have the necessary information in its most current and corrected form? Who got married? Who moved? Did anyone have children?
Important details for employees includes their name, address, social security number, lived-in and worked-in jurisdictions, paid time-off information, employee status, tax filing status, exemptions, and year-to-date wages. Contributions made to 401(k) and retirement benefits matter too.
The government wants to keep tabs on your work done with contracted workers too. Double check the contractors’ names, Taxpayer’s Identification Number (TIN) (which is either the contractor’s social security number or their Employer Identification Number), address, state and local work locations, plus their earnings totals.
2. After you get organized—stay organized.
Systems manage chaos, but if you aren’t someone who actively uses a system that works, chaos can run rampant.
Keep detailed records and compile your receipts and pertinent information in one (organized!) spot so your tax preparation can be as efficient as possible.
Should you be audited, if you have an organized system in place, you won’t be scrambling for documents.
Whereas you previously might have said “Where did I put that…?” while you’re pulling your hair out, with a revised tax strategy you can now simply say, “Oh, that document? I know just where it is. It’s right over here.”
One of the perks of realizing how stressed you are about tax season can be how you can better handle tax season for the coming year. Starting early, creating organized systems, and checking-in with your tax documents throughout the calendar year can help streamline your nerves once “tax time” hits again.
Entrepreneur suggests having each of these forms on file, depending if you file annually or quarterly.
Annually:
·Employer's Annual Federal Tax Return (Form 944); only file Form 944 annually if you do not file Form 941 quarterly
·Employer's Annual Federal Unemployment (FUTA) Tax Return (Form 940)
·Federal Wage and Tax Statements (Form W-2)
·Transmittal of Income and Tax Statements (Form W-3)
·Federal 1099-MISC form
·Federal 1096 form
·Employer information about health care coverage enrollment for their employees, such as Forms 1095-C and 1094-C if you are an applicable large employer
·One form for each employee to report health care coverage; provide Form 1095-C if you are an applicable large employer, or if you are self-insured, you will need to give your employee(s) Form 1095-B
·Some states require income tax returns
·Some states require unemployment tax returns
·Form 943 if you are in the agriculture industry
Quarterly:
·Employer's Quarterly Federal Tax Return (Form 941)
·Some states require income tax returns
·Some states require unemployment tax returns
·Most local income tax returns need to be filed quarterly
3. Need help? Talk to someone who has the right answers.
Becoming a successful small business owner comes with a learning curve that’s all on you. You won’t know all of the answers, and that’s alright. If tax season starts affecting how you sleep at night, talk to a professional.
Sometimes, going the route of working with a tax professional can save you money in the long run. Misclassifying errors and deductions you’re not taking might be your own naive mistakes that can cost you.
4. Plan Ahead. (a/k/a “What about Trump’s Tax Plan for Next Year?)
“So….isn’t everything changing for next year?”
The taxes you’re filing this year for 2017 won’t yet be governed by any new rulings under Trump’s Tax Plan, but there are a few things to note for the taxes you will ultimately file next year.
Business owners may be big winners here (be on the lookout for a 20 percent pass-through deduction), but most likely corporations will take the cake.
Changes in deductions include meals and entertainment (say goodbye to deducting entertainment like taking clients to a basketball game), business automobiles (increased deductions for car depreciation), mortgage interest (the deduction for interest on home equity lines of credit will be eliminated), alimony (but only if you get divorced by the end of 2018), and medical expenses (more provisions for more deductions).
Finding peace of mind during tax season may stem from simply learning more and getting informed. If you own a small business, tax season can actually be an exciting time. Your actions and tax-related awareness may just help keep more money in your own pockets.
We hope have enjoyed this three-part, curated blog series and have learned beneficial information to help you prepare your own small business taxes.
If you missed the other posts, you can find part 1 HERE or part 2 HERE.