5 Key Tax Management Practices for Entrepreneurs and Startups

If you consider yourself a solopreneur? You may be building a business on your own or doing freelance work. Whatever your work situation is as an entrepreneur, consider these tips for self-employed and self-motivated startup founders: 

Use online software 

When managing your taxes as a freelancer or startup founder, the tools you use can make a world of difference. With tax payments for your business, you don’t want to get it wrong, and because of the nature of the IRS, organization is key. 

The best thing you can do to stay on top of your income and tax payments is to research and find the best tax planning software to help you easily manage your taxes. If you want a real-time view of your money and scheduled payments, there’s nothing better than online software. 

Work with an accountant 

Another thing to consider is hiring a professional to help you manage your finances and taxes. This is especially true if you’re starting a business that will have people on your payroll. Managing the goings and comings of your money, expenses, payroll, taxes, and profit can be overwhelming if you’re not especially trained or organized with money. 

However, as a startup founder, your finances are paramount to the success of your business, so don’t be careless with them in any way. Have an accountant on hand to help you manage your business finances. 

Schedule estimated payments

A mistake that many self-employed professionals make is that they don’t have their tax payments ready when it’s time to make estimated payments. Some freelancers don’t even know when or how to make these payments. 

Take time to learn the benefits of estimated tax payments to avoid penalties and pay interest. It can save you money in the long run. If self-employed individuals educate themselves on what’s expected of them, there is a lesser chance of making any tax errors, and they can also stay organized. 

Look into available deductions

As a self-employed individual or new startup founder, you must know how to save money. There are a lot of things that you could get deductions on. Expenses like business travel or “office use” in your home are things you can report and get deductions for from your overall tax payments. We’re talking hundreds of dollars per year in savings and deductions. 

Things you may not even consider, like business meals, can also be counted towards these expenses. If you’re not sure how you can report these kinds of expenses, talk to a tax professional about how to go about filing your tax expenses, so you can be sure that you get it right. 

As a startup, expenses can save you money

If you’re a startup just getting going, this could be a good time to save money on your tax payments. While later down the road, you wouldn’t be able to get deductions on start-up costs and expenses, in the first year of your business, you could save on the amount that you owe the IRS. 

It can be overwhelming to know what can get you the kinds of deductions you want, so when in doubt, consider working with a tax professional to help you determine where you could be reporting things such as startup expenses. 

Filing tax

In Conclusion 

There’s a lot that a freelancer or startup founders should think about when planning out their expenses. You must get it right and avoid any issues with the IRS. Whether this means using the right software or working with top finance professionals, you want to be sure you’re doing whatever possible to stay on top of your tax planning and payments. 

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