How to Save Money On Your Taxes

Bryce Warnes

Bryce Warnes

Writer at Bench
Bryce Warnes is a writer for Bench, the online bookkeeping service that pairs you with a team of professional bookkeepers who do your bookkeeping, so you don’t have to.
Bryce Warnes

Latest posts by Bryce Warnes (see all)

The term “tax deadline” might send a shiver up some business owners’ backs… But it shouldn’t.

Keeping on top of what you need to file—and when—will save you from costly IRS penalties. By setting alerts in your calendar to remind you of upcoming deadlines, you can make sure you’re on track and in good standing.

We’ll take a look at 7 essential dates to save in your calendar, so that you can keep your financials organized during the fiscal year and save yourself from any unpleasant surprises come tax time.

Tax Deadline Extension

Most people don’t realize how easy it is to get a tax extension.

Fill in a one-page form, pay your estimated taxes by the usual tax deadline, and in most cases—voila! An extension is usually granted, giving you up to 6 months to file your tax return.

Tax extensions are handy if you can’t file your taxes by the original filing date or if you’d like more time to work with your accountant to identify deductions and file your return. This alone can save your business money.

The quickest way to file for a tax extension is to do it online.

Once you’re granted the extension to file, you’ll need to save the new applicable deadline in your calendar: below, you can find tax extension forms and dates listed according to business structure. Record a reminder in two weeks ahead of your deadline, so if it looks like you will need an extension, you can begin preparing your documents in advance.

Year End Tax Moves

While this isn’t exactly an official tax deadline, making year end tax moves should be on every entrepreneur’s to-do list.

Tax moves can help you grow your business while lowering your annual taxable income, which reduces the amount of tax you’ll owe the IRS.

For instance, you might be able to report “bad debt”—money you’re owed but can’t collect—to the IRS, and get it deducted from your taxes. Or you might make office repairs… And likewise have those deducted.

Your last day to make tax moves before the end of the financial year is December 31.

Set an alert in your calendar for November 1 to give yourself an eight-week heads up. You’ll want to work with your CPA to identify and make the smartest tax moves available to your business.

January 31st: File Employee Tax Forms

If you have employees working for you, it’s your duty to prepare and file their W2 forms. File these forms late and you might be penalized by the IRS…

  • Up to 30 days after the deadline—$30 per employee
  • Between 30 days after the deadline and August 1st—$60 per employee
  • After August 1st—$100 per employee

The penalties increase depending how late your submission is.

If you’re new to employee administration, learn how to file W2 forms. Also, depending on whether you are submitting online or by post, the deadline submission will differ.

If you’re mailing out your W2s, they need to be postmarked by January 31st at the latest, and if you’re submitting your W2s electronically, your last day to do so is March 31st.

Overall, it’s better to submit online. You’ll have more time to prepare the forms and won’t have to worry about anything being lost in the mail.

Contractor Tax Forms

If you worked with any independent contractors during the tax year, you hired to do work in the previous year will need their corresponding 1099 forms filled out and submitted. The same penalties and deadlines that apply for W2 forms as apply for 1099s.

Quarterly Estimated Taxes

Almost all businesses are required to pay taxes in quarterly instalments, four times a year… Sole proprietors, partners, S corporation shareholders, corporations, and self-employed people who expect to pay more than $1,000 in taxes, and  businesses filing as corporations who expect to pay more than $500, fall under this rule.

Paying four times per year rather than once means you have four times as many tax deadlines to meet. If you miss the deadline, you’re required to pay 5% annual interest on the money owed. This amount gets calculated from the day you miss your deadline—meaning that, the longer you leave your quarterly estimated taxes unpaid, the more they’ll end up costing you.

Deadlines for quarterly estimated taxes are:

  • April 18, 2016 (for payment period January 1 – March 31)
  • June 15, 2016 (for payment period April 1 – May 31)
  • September 15, 2016 (for payment period June 1 – August 31)
  • January 17, 2017 (for payment period September 1 – December 31)

Set a two-week advance alert for each deadline, so you’ve got plenty of warning before each quarterly payment is due.

Annual CPA Check-Up

If you’re serious about growing your business, you should meet up with your accountant shortly after the end of each tax year for an annual check up. The goal of these meetings is to review your business’s performance during the tax year just closed and use those insights to plan for the future.

A good CPA will debrief you on your business’s financial health and help you craft a growth strategy for the year ahead.

Depending on any difficulties you faced during the previous year, you may be able to make changes to smooth our your future progress.

For instance:

  • Did you have difficulty categorizing expenses? Maybe it’s time to better define the separation between personal and business expenditures, or to look into expense tracking solutions.
  • Is your business growing? You might want to consider changing your business structure.
  • Are month-to-month financial tasks taking up too much of your time? Consider automating your bookkeeping or payroll tasks.
  • Do you have a vehicle or office you use for work? If you aren’t already, you should consider reporting them for the sake of tax deductions.

A qualified accountant can help you address these problems and suggest solutions, as well as uncover potential “hidden” tax deductions and other money-saving measures you can take to reduce the cost of doing business.

***

Don’t let tax deadlines sneak up on you. Add reminders for each of these deadlines in your calendar and you’ll have enough time to take advantage of financial planning and opportunities for growth, well before each deadline is due.

A carefully curated and well-populated financial calendar will help you keep your business on track throughout the fiscal year—and make you don’t miss any important dates or opportunities.

Fundera users receive 20% off their first six months with Bench. Want more time to grow your business? Let us take care of your books. Claim your free trial today.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Bryce Warnes

Bryce Warnes

Writer at Bench
Bryce Warnes is a writer for Bench, the online bookkeeping service that pairs you with a team of professional bookkeepers who do your bookkeeping, so you don’t have to.
Bryce Warnes

Latest posts by Bryce Warnes (see all)

1 Comment

Most Recent

  • Ben Rashkovich

    Friday, July 29th, 2016

    Didn't realize how easy getting a tax extension was.

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