Tax time can be a hassle for the typical entrepreneur. In the final analysis, the typical entrepreneur is far more interested in building his or her business than in dealing with taxes and bookkeeping.
Nonetheless, dealing with taxes is a crucial part of an entrepreneurs overall efforts. As a result, there are five year end tax tips that the typical entrepreneur should bear in mind and consider applying and following.
Organize Documentation
A very basic — but fairly frequently overlooked — year end step an entrepreneur needs to take is getting tax related documentation in order. Whether an entrepreneur is going to prepare his or her own tax return, or will be seeking professional assistance in this regard, documentation relating to taxes must be put into a manageable and useable order.
Credit Card Processing and Merchant Accounts
Another year end tax tip for an entrepreneur is organizing credit card processing and merchant accounts records. In this day and age, a considerable amount (if not a majority) of a typical business’s transactions are done using credit or debit cards. For this reason, the records associated with credit card processing and merchant accounts are crucial when it comes to preparing annual tax filings.
Consider Making Expenditures
If an entrepreneur has certain bills that will become due directly after the beginning of the year, paying them before the current tax year draws to a close should be considered, according to Entrepreneur magazine. As a general rule, paying these bills early and taking a tax deduction sooner rather than a year later oftentimes makes solid financial sense for an entrepreneur.
IRA Investment
Entrepreneurs are somewhat notorious for being a bit lax in retirement planning. An important tax tip for an entrepreneur to bear in mind as the year draws to a close is making a contribution to an IRA — or setting up an individual retirement account in the first instance. If at all possible, in many cases an entrepreneur is well served by trying to make the maximum contribution into his or her IRA as the year draws to a close.
Consider Engaging a Tax Professional
In the final analysis, an entrepreneur needs to consider seriously engaging the services of a tax professional to assist with year end tax related matters. This includes the preparation of a tax return. In most cases, an entrepreneur is best served by having a tax professional assist in year end tax related matters.