With an April 15 tax deadline looming, businesses across the country are preparing to file their 2013 taxes. Tax season can be both an administrative and financial burden. New data reports that only 41 percent of small business owners feel very confident they are maximizing their tax benefits for the 2013 year, according to a recent Spark Business OmniPulse Survey conducted by Research Now. In fact, 22 percent of business owners plan to file for an extension this year. The survey also suggests small business owners are faced with a lack of resources and tools when it comes to filing their taxes.
Fortunately, there are a variety of ways to help prepare your business for tax season and minimize your tax burden. Capital One has a few tips to help small business owners reduce stress and maximize tax benefits:
* Hire a professional. Meet with your accountant before you begin. Tax laws change every year, so a professional advisor or CPA can offer guidance on the latest legislation surrounding eligible tax deductions. Equip yourself with updated information at IRS.gov.
* Organize (and digitize) your records. Computerizing your paperwork is a good way to streamline operations and find forms quickly. The IRS requires that you keep paperwork from the last seven years, which includes bank and credit card statements, transactions and expenses.
* Manage finances year-round. To help maximize deductions, keep a detailed log of expenses throughout the year to easily reference when tax time rolls around. Based on what you spend, your business can be eligible to write-off office supplies, equipment, furniture, software, travel expenses and more. Consider streamlining all expenses on a business credit card account to help simplify tracking and maximize rewards.
* File for an extension. You still need to pay your bill, but your business could be eligible for a six-month paperwork extension. Nearly 40 percent of business owners say they plan to file for an extension because they don’t have the necessary background information. If you do choose to extend, make sure you file the extension by April 15 or else you could be subject to costly fines.
* Do your research. There are other great ways to help relieve your tax burden, like setting up a low-cost 401(k) plan for you and your employees. Contributions are tax-deferred, plus a 401(k) plan can be a great tool for employee recruitment, retention and morale. ShareBuilder 401k offers intuitive tools along with market-efficient investments and model portfolios designed to make setting up and selecting the right plan quick, easy and affordable.
Follow these tips to arm your business with the effective tools and knowledge to have a successful tax season this year. For more helpful information on managing a small business, visit www.capitalonesmallbusiness.com.