Being a small business owner means you wear a lot of hats, but tax season doesn’t have to be the one you dread the most. Taxes for your business are definitely more complicated than personal taxes, but with a little planning, they don’t have to be overwhelming. Here are a few things you should know:
1. Estimated Taxes Are Your Friend
Unlike W-2 employees, who get taxes taken out of each paycheck, small business owners are responsible for paying taxes quarterly. These estimated tax payments prevent a massive bill come tax time. It’s better to pay a little along the way than scramble for cash in April.
2. Deduct, Deduct, Deduct!
As a business owner, you have access to a ton of deductions that can lower your tax bill. From office supplies to business meals, these expenses add up. Just make sure to keep good records—receipts are key to proving your deductions if the IRS ever comes knocking.
3. Don’t Forget Self-Employment Tax
Self-employment tax covers Social Security and Medicare. Employees don’t see this as a separate tax because it's automatically withheld, but as a small business owner, it’s your responsibility. It's around 15.3%, so plan for it as part of your tax payments.
4. Keep Up with New Tax Laws
Tax laws change, and sometimes those changes can benefit small businesses in unexpected ways. For instance, recent tax reforms have increased the deduction for business meals. Keeping up with these changes can save you a lot of money over time.
Feeling overwhelmed? No worries—at RLS, we’re experts in helping small business owners handle their taxes. We can simplify the process so you can focus on what you do best: running your business.
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