If you started a new business last year, then you’ve probably recently received a letter in the mail or an email reminding you that the taxes for your LLC or startup will soon be due. If that is the case, then you are more than likely worried right now about what precisely needs to be done for this.
Have no fear. Here are the top three things to keep in mind during your business's first tax season.
Pull Together You’re Income
The first thing you need to do is to see what you have. Pull together all the invoices and payments you have received for your LLC to known what your overall income for the year has been. This will not only help you figure out how much you may owe in taxes, but it will also help you find your quarterly estimated tax payment since you are self-employed. Please note, however, that this quarterly fee does not apply to startup founders in their first year but required in future years. If this is your first time, you may want to use last year’s income, tax credits and deductions to calculate your expected tax burden. To make things easier for future tax seasons, be sure to set a small percentage of your income aside specifically for taxes.
What Can You Deduct?
You may be surprised by what you can deduct in your taxes. Start-up expenses, necessary equipment, and even business trips to build relationships in your field can be written off at the end of the year as a business expense. Be sure to keep a record of your receipts and research how much you can deduct. Also, if you own a small business that regularly gives back to the community, ask for a receipt to deduct this as well.
When in Doubt, Hire Help
Tax season is not something you should take guesses on especially when it involves the first year of your business. Hiring a financial advisor or accountant to help you understand the process will not only make it easier to decode your taxes, but it can also ensure that you will get the most out of your tax returns. Unsure if hiring someone is worth the investment for your company? See if they offer consultations so you can find the help that is right you.