While December 31, 2011 may seem a long way off, there’s no time like the present to get ahead of the game for your 2011 taxes. As a small business owner you have a lot to think about. Keeping up with your everyday accounting practices is the best choice to make certain that your bottom line remains healthy.
We offer these 2011 tax planning tips to Arizona entrepreneurs:
- Plan for income tax payments: Speak to your accounting professional to estimate what your income tax obligations will be and save for them monthly. Set aside a percentage of your net profits on a monthly basis and deposit them into an interest-bearing account. Saving monthly will make it easier to pay off and avoid a cash scramble at year end.
- Remember sales tax payments: Is your business required to collect sales tax and file sales tax reports? If you aren’t certain, check with your accounting professional. If you’re required to collect and/or file sales tax reports, you need to file the report even if you went a quarter without having any sales tax obligations.
- Bookkeeping matters: Set aside time at least once a week to reconcile your expenses, income and invoices in a bookkeeping program. Set up a physical filing system to keep your receipts in order. On a monthly basis take the time to reconcile your bank statements. If bookkeeping is not your forte, consider hiring an accounting professional to help you track your income and expenses and perform your reconciliations. Saving your receipts not only helps you maximize your year-deductions, but it’s required by the IRS.
- Save for retirement and plan for a lower tax bill: An entrepreneur can lower his or her tax bill by contributing to an IRA. Every dollar you contribute to an IRA equals a dollar saved and reduces your 2011 taxes.
- Talk to a professional: Because of the ever-changing tax laws and the complexities of the tax regulations, it’s best to consult with a small business accounting professional at least on a quarterly basis to make certain you are properly accounting for all income and expenses.
Having an accountant or a bookkeeper as a business partner is a surefire way to make certain your business is prepared for any and all tax savings that are available.
