Module 7: Tax Planning
- Get qualified advice. If you want to learn more about tax planning and reporting, the IRS has developed a series of courses on managing taxes.
- A business may be required to pay several types of taxes. Find out requirements for each of these types as they apply to your business:
- Income taxes (federal and state)
- Employment taxes
- Self-employment taxes
- Sales taxes
- Local taxes
- Some business owners make the mistake of spending tax money on business operations. When taxes come due, they find they are short of funds. You can expect to face significant penalties if you do not pay taxes when due. You need to have the money in the bank when it is time to pay taxes. Avoid mixing tax funds with other funds.
- Have a sound accounting system in place. Accounting systems will track income and expenses to help you calculate and file accurate taxes. Having a good understanding of taxes along with a good accounting system will allow you to plan ahead, manage your money and pay your taxes on time.
- Small business accountants can do much more than record transactions and prepare reports. Accountants actively analyze and interpret information to help you run your business and are often good advisers for a new business idea. Look for an accountant with a good track record with business clients. Ask successful local business owners who they use.