Although young entrepreneurs have a lot on their plate, especially the ones building a startup from the ground up, making a proper plan for tax season is not something that should be put off or overlooked. Instead, it should be well thought out and carefully planned in advance, which is why we decided to give you some basic pointers on startup tax management.
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Managing and preparing taxes is an ongoing process that happens throughout the year, and it should be based on keeping flawless records of your company’s income and carefully implementing firm financial management from the get-go.
Here are some of the most important tips to consider:
You must realize that tax preparation is a year-long process, which means you must plan ahead and keep all your expenses and deductions verifiable via the meticulously organized process of recordkeeping. Each and every invoice and receipt your company receives throughout the year should be filed and kept. You can choose the keep this documentation in a physical file, or you can store it digitally.
Do your homework thoroughly. The more informed you are about federal and state-specific tax responsibilities, the better.
Find out everything there is to know about:
- payroll tax
- sales tax
- corporate taxes
Update Financial Statements Regularly and Accurately
Not only will this help you with your tax management endeavors, it will also be a good indicator that your business is healthy and growing.
Financial statements also provide insight into your:
- profit margins
- operating revenue
Consider Hiring a Professional
Hopefully, your business will start to grow and expand, and regardless of how skillful you are (or have become) at tax management, you might want to take into account (no pun intended) hiring a tax management professional to go over your finances. It is always better to be safe than sorry.