April 2014 is far ahead of us, but when it comes to getting strategized for tax season, there's no time like the present. For small businesses, tax season can feel like a dreaded time. There are so many complications involved, and it can be difficult to find good answers.
When you think of taxes in terms of your cash flow, you may feel as if the two don't go together. It's true, these two things can definitely work against one another, but if you know a few little-known strategies for tax season success, you'll find yourself ahead of the curve.
Leave no deduction behind and no strategy unimplemented! Read on for four tips on how to win next tax season!
1. Write Off Obsolete Inventory
Think about what you no longer sell, because the products are damaged or obsolete. It can either be coaching program software, a PDF guide, or even physical goods. This is a good tax write-off to make, because you've taken a loss in your income, and you'll have to pay fewer taxes in April 2014. Work with an accountant to get this filing process done right.
2. Find a Tax Advisor and Talk with Others
As with anything in business, it helps to talk! Think of taxes as something you share in common with just about everyone. Work with a tax advisor to explore strategies and options that soften the blow to your cash flow. And, especially if you're starting out in the entrepreneurial world, talk with other business owners about their experiences. Tax talk isn't always fun, but you'll enjoy common ground with others.
3. Forecast Your Income
It sounds difficult to know how much you're going to make in a year, but think about how much you've grown, and create a conservative estimate for how much you think your business will be worth. (I hope it's A LOT!) Once you've done that, you can develop an effective planning strategy that works best for you.
4. Work the Government's Tax Department
Know when taxes are due, even if you have a tax adviser or accountant. Remember, any financial burdens will be on you, if there is a mistake. It's a bad feeling to watch your profits disappear when taxes are due. Avoid having to make unexpected payments or penalties by working with the Tax branch, being completely forthcoming, and getting proactive.
Do you work from home? Write off your home office as a deduction!
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