Fri 27 Apr 2007
Tax Tips For The Home Based Business Owner
One of the most stressful times of the year is when it is time to file your tax returns. If you're like me, then filing your taxes can be a frustratingly prolonged process, and be very challenging, because it involves various factors like collecting all the essential documents and finding the right accountant. And if you are a home-based business owner, it can be even more daunting. Nevertheless, there are some things that you can do to make the tax filing process easier.
Take Great Care in Choosing Your Accountant
As a business owner, choosing the right accountant will be one of the most important decisions you can make. Don't rush into hiring the first accountant you come across. Ask for referrals from friends and business associates, making that they specialize in taxes for small business. Find out if they will handle both personal and corporate returns, if required. Determine in advance the fees your accountant will charge, especially for consultations over the phone.
Separate Personal and Business Accounts
Just as you should not mix personal and business matters, you should also follow the same principle when it comes to finances. It is important to have separate accounts for business and personal purposes. You could open a savings account where you can set aside the taxes for each month — this is very helpful when the end of the year comes, because you will not have to scramble around at the last minute worrying about how to pay the tax bill.
If you keep track of all the records of your business transactions by keeping the business receipts of the whole year paying taxes will become a stress-free process.
Ask your accountant or tax professional for an itemized list, so that you will be able to identify what items need to be tracked. Find out what items are considered “business expenses”. You can get some deductions on your car, home, or other utilities. Check with your tax professional or accountant about these deductions.