Getting the basics down allows for you to understand how to set things up to make it easier for your tax professional. The internet provides a wealth of information in articles, videos, etc. Get a basic understanding of how the tax system works, as well as key details on what you need to track. As a businessman understanding the tax system helps you to set up business strategies that will control taxes and maximize your profits.
2. Pay your taxes as you go
Set up a savings account and withhold 20% each month to make your quarterly tax payments.
Getting behind and making your tax payments can start snowballing an enormous amount of
debt and the IRS is not a group that you want to get into debt to.
3. Keep books
Good bookkeeping is a basic good business practice for running a business regardless of taxes.
Being able to establish establish what your profit (and if you are making one) is a fundamental in
running a successful business. Many new businesses find out after it is too late that they are not
making one. You only want to pay taxes on money you make (ie profit). Profit equals gross
revenues minus expenses. Having good books makes it easier for your tax professional to file
your tax return and helps in case of an IRS audit.
4. Get your records to your tax professional early
Deadlines, deadlines deadlines…If everyone gave their records to their tax professional on the
last week before tax deadline, there would be no way that the work could be completed ontime.
Get your records over to your tax professional as early as possible to allow him to complete your
return without being under pressure. That way, he is more likely to do a better job..
5. Save your records
Save your business records for at least 3 years in case of an audit. In some cases longer. Your
tax professional can help you with what to keep. When you no longer need them have them
shredded. Many times, businesses hold free shred days to get the public to visit their business.