The economy is growing at a steady rate these past few years, allowing businesses to bounce back and start growing again alongside it. Business owners are enjoying a booming market, more customers, higher purchasing power and more opportunities to explore. However, while the market is lucrative, it is also more competitive than ever.
For a business to succeed and stay ahead, business owners must be able to find competitive advantages in different posts. Knowing how to optimize your business’s taxes can give you that extra edge you need to stay ahead. To help you get started, here are some of the latest tax secrets you need to know.
Stick to Quarterly Tax Payments
Most businesses are required to pay their taxes on a quarterly basis with a few exceptions. If your business is relatively new, you actually get a tax break during the first year. A handful of businesses who don’t meet certain requirements are also not required to pay taxes on a quarterly basis; you can choose to pay your taxes at the end of the fiscal year instead.
However, sticking to quarterly tax payments is the best way to go. You don’t have to worry about not having the money to pay your taxes at the end of the year. It is also much easier to spread the burden of business taxes over several quarters instead of dealing with them in one lump sum.
There is a great approach to help make quarterly taxes more manageable, too. First, you need to set aside a portion of your cash reserve for tax purposes. Every time you receive payments from clients and other sources, calculate the amount of tax you have to pay and set the money aside immediately.
Next, you need to have an experienced tax consultant or an in-house tax manager to stay on top of everything. That brings us to our second secret.
Avoid Costly Mistakes through Expertise
A lot of business owners are actually taking a tax degree online to help them navigate through taxes better. You can enroll in top universities such as Northeastern University and complete the program to earn an online master of science in taxation in as little as 18 to 24 months. The skills and knowledge you can pick up along the way will be invaluable.
Alternatively, you can hire a master in taxation or online MST degree holder to help you. The reason why having an experienced professional doing your business’s taxes is a must is simply because tax-related mistakes are often the costliest. If you miscalculated last year’s taxes, for example, the amount of fines and fees you have to pay is often substantial.
Keep Things Separate
One last thing to always keep in mind when it comes to taxes is to keep your personal and business taxes – and finances – completely separate, even when you’re operating as a self-employed sole proprietor. You will find managing your taxes – both business and personal taxes – a lot easier to do this way. You will also be able to enjoy double the tax benefits as well as specific tax deductions in certain cases.
Now that you have these tax secrets in mind, you should be able to optimize your business taxes and get that extra edge you need to stay ahead. Start today, review your taxes and be more competitive.
