You can’t ignore it any longer: Tax season is approaching.
It shouldn’t surprise any entrepreneur that taxes are due, but for some reason the season seems to sneak up on a lot of people. The extra work and long hours it takes to prepare your return can add a lot of stress to your already hectic schedule. Here are a few ideas to keep your wits about your during this taxing time.
5 Ways to Simplify Taxes
Whether you chip away at the task little by little or go at it full force, get the process underway now so you don’t lie awake thinking about it for the next couple months. Simple actions you can take include putting all of your tax documents into one folder, gathering receipts, and printing out bank statements. It may sound silly, but taking these baby steps will make you feel a lot better about the process.
Get in touch with your tax professional
For most entrepreneurs, it’s worth a few hundred dollars to hire a tax professional to put together your return. Get on their calendar now so you don’t run up against the April deadline.
Tax experts are up-to-speed on all changes to the current tax code and don’t make as many mistakes as individual entrepreneurs who file their own taxes. Invest a little cash up front in order to save yourself money and a stress headache later on.
Contractors vs. employees
Knowing the difference between contractors and employees will help you simplify your tax season. Contractors are those workers who are free to determine how, when, and where they work, while employees are required to work specific hours and often operate out of a central location. You aren’t required to carry workers’ compensation or unemployment insurance for contractors, while employees enjoy these benefits and often qualify for health insurance and retirement programs.
Contractors receive a 1099 form at the end of the year, while employees are issued a W-2. If you accidentally misclassify either kind of worker, your company could be assessed a stiff penalty.
Clear your plate
If you’ve already procrastinated collecting receipts and mileage logs, then you’ll have to set aside some time to pull it all together. As a busy entrepreneur, you’re already pulled in every direction, but you’re only going to make progress by setting aside hours or days to attack the issue.
It may be tempting to say “yes” to that fancy business dinner or to taking on a new client, but resist. Putting too much on your plate will take away focus from finishing your taxes. Learn to say “no” to things you don’t have to do, and your stress levels will diminish this tax season.
You hired an amazing team to help you reach your goals—use them. Task staffers with gathering tax materials or let them oversee operations while you take on the additional workload. It might initially be stressful to hand over new responsibilities, but the exercise will build trust among your staffers and leave you with more time to decompress.
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