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9 Things to Do Now to Make Your 2015 Taxes Easier

Were you frantically scrambling to get ready for Tax Day on April 15? Were you worried you wouldn’t get it together on time? According to a survey by Capital One, nearly 25 percent of small business owners had planned to file for an extension on their 2013 tax returns, and 40 percent of them are doing so because they were not prepared with necessary background information to file their taxes.

If you’re one of those entrepreneurs — or if you’d like to avoid a rerun of this year’s last minute headache — here are some steps you can take now to prepare for a stress-free season for your 2015 taxes.

  1. Hire a professional. “More than 80 percent of small businesses use pros,” says Barbara Weltman, a business and tax attorney, and author of the longtime bestselling series J.K. Lasser’s Small Business Taxes 2014. Look for an accountant or tax preparer who specializes in small businesses and knows what tax issues affect your industry. Accountants make it their business to stay on top of the constantly changing tax code—something you probably don’t have the time or desire to do.

  1. But don’t abdicate responsibility. Even if you use a professional to prepare your 2015 tax returns, you’re still responsible for the decisions you make. After all, it’s your signature on the tax return, and you’re the one who will be held responsible in case of an audit. Be sure you understand the steps the accountant is taking and feel comfortable with what he or she is doing, warns Bryan Williams, CPA/PC, and owner of a Liberty Tax Service franchise in Front Royal, Virginia.

  1. Systematize your accounting. “Business owners need an accounting system that reflects established accounting principles and is tailored to the type of business, whether service or merchandise,” says Williams. You can use a standard accounting system such as QuickBooks or, if necessary, have specialized accounting software developed. Once you’ve got your accounting system in place, “setting up the relevant chart of accounts is top priority,” Williams says.

  1. Get organized. Good recordkeeping is essential to back up the information reported on your tax returns and optimize writeoffs, Weltman says. Start now and keep detailed records of expenses you may want to deduct on your 2015 taxes, such as office equipment and supplies, travel and entertainment, and business use of your vehicles. Auto expenses, travel and entertainment are often problem areas, Weltman says; many entrepreneurs don’t keep good records of these expenses then run into problems when they try to deduct them. Apps such as Expensify, Concur or Shoeboxed can simplify expense recording. You can also use business credit cards for expenses; the statements typically break down charges by category, so it’s easy to see what expenses should be reported where.

  1. Keep an eye on proposed tax law changes that affect your business. “Fifty-five tax breaks expired at the end of 2013. Whether they will be extended remains to be seen,” says Weltman. “Key tax breaks to watch for include the research tax credit, the work opportunity credit for hiring from certain targeted groups, 50% bonus depreciation, and an increased Section 179 deduction for buying equipment and machinery.”

  1. Understand the effects of the Affordable Care Act (aka Obamacare). “We learn something new about the Act almost every day,” says Williams. Keep on top of news about the ACA; the Kaiser Family Foundation is a good source of information. “Consider [buying] health coverage for employees to take advantage of the increased small employer health insurance credit,” says Weltman. “However, be aware that only coverage obtained through the Marketplace [exchange] qualifies.”

  1. Consider setting up a 401(k) or other retirement plan for yourself and your employees. Today, you can find retirement plans suited for even the smallest companies; check out those from ShareBuilder and Vanguard. Aside from the personal tax benefits you gain by making pretax contributions to your own retirement plan, your business can get tax deductions if you contribute an employer match to employees’ plans.

  1. Don’t forget about estimated 2015 taxes. “April 15 is the [due date for the] first installment of 2014 estimated taxes, regardless of whether the business owner obtained a filing extension for 2013 returns,” Weltman warns. “[Be sure to] factor in income taxes, self-employment tax and any additional Medicare taxes on earned income and net investment income.”

  1. Get help. “Between college courses, the SBA, SCORE and the SBDC, there are [many low- or] no-charge resources available to assist the business owner,” says Williams. Take advantage of these resources to get your accounting system organized and learn how it works. The result will not just be a means to filing your 2015 taxes next April, but also a meaningful tool to chart the course of your business 24/7.



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