Simply put, anyone who's not good with number crunching should hire an accountant. The first rule of small business accounting is to hire an accountant. The second rule is to hire an accountant to assess their business accounting prior to filing their business's taxes.
Small Business Accounting Tax Deadline
Most people, when they start a business, don't know about deadlines to file taxes. They are different for corporations and small businesses, than personal taxes. Personal tax returns have to be filed by the end of April, while business and corporate tax returns must be filed in March.
Good small business accounting records need to be kept. The tax code usually isn't common knowledge for small business owners when the start out. They don't understand what can and cannot be an expense write off. These mistakes can lead to additional fees being charged and penalties at tax time.
Small Business Accounting Best Practices For Taxes
Small business owners need to ensure that all online order forms, and receipts are kept organized. There isn't anything more difficult than sorting through mounds of paper at the end of the fiscal year. Sometimes receipts go missing. Record keeping in small business accounting has to be taken seriously, by keeping records organized.
Charitable donations need to be monitored, and both parties need to account for them. The charity and the philanthropist both need to get receipts and keep impeccable records. Anything that has been given to the charity, including personal time, needs to be kept track of, and receipts kept.
One of the most important small business accounting practices is to never fabricate or give false information about deductions. Any deduction that is claimed needs to have records, or a paper trail to prove it. Sometimes, the tax department will ask questions, and the business owner has to provide honest answers. Fabricating records and over-filing expenses are federal offenses, carrying legal ramifications above fines and penalties. Going to jail for not keeping good records, is a distasteful way of ending the fiscal year.
Record keeping for the money a business makes is just as important as money being paid out. Keeping bank statements can really help to keep small business accounting on track, preferably in a safe fire-free place. The responsibility lies on the business owner's shoulders. The tax man doesn't care if everything is burned in a fire.
If a business accepts cash, every transaction must be documented with a receipt. Cash should never be taken without a receipt being handed to the payee. As well, all cash receipts should be claimed at the fiscal year's end. When you think about it, the majority of all Mafia bosses or members of criminal organizations weren't put in jail for murder or any of their other horrible crimes they were charged with. They were sent to jail because of issues related to tax evasion.
When it comes to small business accounting, an accountant will help business owners avoid those annoying penalties at tax time.
This article was written by Tatiana Emrick, on behalf of RBZ, LLP, utilizing advanced techniques that put technology, people, and processes to work for you. To know how you can market an accounting firm, you may visit Wikihow.