5 Tips for Staying on Top of Your Business Taxes

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Staying on top of business taxes can be quite a big job to do, which is why most business owners hire professionals to do it for them. If you're juggling your day-to-day operations and your clients and trying to keep up with your growth plans, you might find juggling your taxes on top hard. But tax management doesn't have to be complicated. As long as you're put in the right blocks in place, you can make sure that you can climb those blocks into greatness. You can reduce your stress and even stay compliant all year long, even as systems like making tax digital for self-assessment become more common. Let's take a look at some straightforward tips to help you to stay organised and in control of your taxes.

1. Keep your business and your personal finances separate. It's a simple thing to do, but it's important to separate your business and personal finances. Using a dedicated business bank account and credit card allows you to make sure that you're not mixing your expenses up. It also makes it easier to track your income and expenses and identify tax-deductible costs. When everything is clearly separated, you're going to save yourself a lot of time.

   
   

2. Keep on top of your income and your expenses. Tracking your income and expenses regularly is important, but don't wait until the end of the year to figure out where your money went. You need to get into the tracking habit now so that you don't have to worry about it later. You don't need anything fancy here. A basic accounting tool or spreadsheet works just fine as long as you're consistent with it. The key is in knowing how much you're earning and where that money is coming from, what you're spending, and where you could reduce your costs. Regular tracking also helps you to spot any cash flow issues before they become a real problem.

   
   

3. Set aside any money for taxes as you earn it. You don't want to spend money that will be taxed at the end. A portion of your income will eventually go to taxes, so treat it that way from the beginning. A good rule of thumb is to find out what percentage you have to pay in tax and set aside that percentage of every payment you receive. Keep that money in a separate savings account and avoid touching it unless it's tax time. This will help you to prevent panic when a tax bill arrives and helps you to avoid scrambling out for cash.

   
   

4. Know your deadlines. If you've got an accountant, you won't need to worry too much about this, but missing tax deadlines can lead to penalties and interest that you could avoid. Take time to understand which deadlines apply to your business and mark them on your calendar. You can gather your documents early and review your numbers before you file, so if you're unsure about anything, you can have a conversation with an accountant to get you on track.

   
   

5. Always get professional help. No matter the size of your business, you don't have to do everything yourself. A qualified accountant or a tax advisor can help you out with understanding deductions and allowances and planning ahead to avoid and reduce future tax bills.