Whether you are an owner of a towing company, a restaurant or provide cleaning service. You are familiar with the anxiety of tax season. Shuffling through hundreds of records, scratching your head trying to figure out why the total of the receipts is not matching with your bank statement. It’s almost the part of running the business and most people come to accept it.

This “scramble and fix” method is more than just a headache, it could cause your business to lose hundreds and thousands of dollars that can be avoided otherwise. The U.S. tax code is designed to help the people preparing for taxes beforehand.

The Hidden Costs of Reactive Tax Filing for Minnesota Small Businesses

There are three different ways you could puncture a hole in your business’s pockets and let the money fly away if you are not prepared in advance:

• Self-Employment Tax Traps: Let’s suppose the business is booming, that may sound good and you might get comfortable with the money coming in but it will also mean you unnecessarily paying thousands in self-employment taxes. Switching your tax structure to that of an S-Corp will help change that.
• Workforce & 1099 Penalties: Consider this, you have been waiting for the dreaded tax season and it is finally here. You were procrastinating or were not prepared enough so you started to file taxes at the last minute. You might miss out on some tax incentives like section 179 that would have allowed you to write-off your depreciating new machinery or vehicles. This would mean losing out on thousands of dollars.
• Overlooked Tax Incentives: One of the nightmare situations is getting audited by the IRS because you accidentally miscategorized your workers or were unable to file taxes on time. These situations can simply be avoided by preparing for taxes before the season comes.

Moving from “Processing” to “Strategy”

• Quarterly Payment Setup: Now imagine, instead of going through hundreds of records at the end of the year, you take care of a couple dozen each month. Or maybe you tally up your receipts with your bank statements on a weekly or a monthly basis to make sure everything is balanced. This approach will not only make the tax code friendlier to you but also will save you some head scratches.
• Modern Tools: You can also use tools like Taxdome utilized by our client portal to upload receipts and logs for your business in real-time on your smartphone. This not only makes it easy to record transactions but also makes these logs easier to access for you and your accountant.
• Ease In Communication: If you are a part of our proud Latino community, you are familiar with the frustration that makes your head spin for not understanding what your accountant is communicating. You may need a partner who understands your native language. This makes it easier for you to understand your business and makes the whole process of running your enterprise more comfortable.