Workforce Wednesday: Small business tips for smoother tax season
The 2019 tax season is underway, but between managing daily operations and balancing budgets, taking time out at the beginning of the year to prepare taxes can be a struggle for small business owners.
"They have to be very diligent in learning the ropes," said Darcy Carney, of Carney Consulting Group.
Besides running her own small business, Carney's consulting group handles accounting for others.
"I think for small businesses the challenge is to actually get around to doing the books," Carney said. "It's not a very fun thing to do. It can be really time consuming, especially if you don't know exactly what you're doing."
According to the U.S. Small Business Administration, small businesses employ more than half of Alaska's private sector workforce. Small Business Trends says common mistakes businesses make when filing taxes include under-reporting income or expenses, especially among smaller clients, and misunderstanding which expenses can qualify as a deduction.
"What I advise my clients to do is have two credit cards and be very disciplined in using one for personal and one for business, rather than mixing them," Carney said. "There's ways in the accounting program to accommodate the mixing, but it makes more work. So, why do that? Just avoid it."
If saving receipts is a struggle, there's an app for that. Digital platforms like Shoeboxed or Wave allow users to scan and sort receipts for safe keeping.
"For business purposes, the IRS wants receipts for anything over $75," Carney said. "I think one of the most important things is that you get your bank statements and that you look at your bank statements."
Whether it's digital or hard copy, Carney says keeping close tabs on your business' paper trail
is the best way to make filing with the IRS easier.
The Alaska Small Business Development Center offers several workshops this month, including a webinar on payroll taxes and basic book-keeping. For more information, click here.
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