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5 Tax Planning Basics Every Small Business Owner Should Know

 

Many people think tax planning involves complicated strategies, but most of the time it's simply understanding where you stand before tax season arrives. This gives you time to make informed decisions and avoid surprises when it's time to file.

 

At Schryver & Associates, we focus on practical tax planning that helps business owners stay ahead of their taxes.

 

• Keep Accurate Records

  • Good records are the foundation of smart tax planning.

  • Track income, expenses, and receipts throughout the year, not just at tax time.

  • For example, tracking mileage, supplies, and small business expenses as they happen makes it easier to identify deductions and prepare your tax return at year-end.

  • For more information about record keeping, click here.

 

• Separate Personal and Business Finances

  • Mixing accounts can create confusion and errors.

  • Maintain separate bank and credit accounts for your business.

  • This makes bookkeeping easier and gives you a clear picture of your business performance.

 

• Know Your Common Deductions

  • Small businesses can deduct a variety of costs, from home office expenses and vehicle costs to software subscriptions and retirement contributions.

  • Understanding what’s available allows you to plan purchases and keep more cash in your business.

  • For more information about common business expenses, click here.

 

• Plan for Estimated Taxes

  • If your business doesn’t withhold taxes automatically, set aside money for quarterly payments.

  • Paying on time avoids penalties and keeps cash flow predictable.

  • For more information about estimated taxes, click here.

 

• Review Your Business Structure

  • Your entity type affects how your income is taxed and whether you pay self-employment tax.

  • This depends on your entity type and any elections you've made, like an S-corp election. It should be reviewed periodically to make sure it still fits as your business operates and grows.

  • For more information about business structures, click here.

 

 

These basics are a good starting point. Tax planning also means looking ahead at changes in your business and personal situation that could affect your taxes.