How Are YOU Preparing Your Small Business Taxes?

Tax season is in full swing, and here at Focus we’ve seen many SMB professionals ask for tips on filing their SMB taxes.  We’ve done some research, and have come up with a couple of recommendations to (hopefully) ease the process for you.

Many finance professionals agree that the biggest obstacle that SMBs face regarding taxes is knowledge.  Taxes aren’t the first thing that one thinks of when starting up a company, and ever-changing tax laws only add to the confusion.  There is a lot of information to be found on the web, but the single most correct source of tax-related information is the IRS website.  You would be surprised as to how many people forget that it is there!

On the home page there is substantial list of FAQs, as well as news and information about special tax options and measures of the $787 billion dollar stimulus package.  The business section has quite a few of well organized topics and articles on everything ranging from audit techniques to operating a business to tax calendars.  The IRS even has a handy feature that allows you to subscribe to the business tax calendars via Outlook 2007.  Lastly, you can also search for specific forms, or contact your local IRS office if you still have questions.

When it comes to preparing taxes most seem to agree that hiring a tax professional is the best bet.  It is the job of a tax preparer to keep up with tax laws and completely understand the ins and outs of the complicated system.  They’ll make sure that you file properly (and on-time), receive the appropriate deductions, and can help you plan for your taxes in the coming years.  Plus, establishing a rapport with a tax advisor can be helpful when you run into questions throughout the year.  A Google search, Yelp, and personal recommendations can be useful when looking for a tax advisor.

If you’re absolutely set on preparing taxes on your own then make sure to enlist the support of tax software.  The software will automatically check for missed information and deductions, allow you to save and come back, and will often file Federal taxes for free.  Intuit, the makers of Turbo Tax, are trusted industry leaders for SMB accounting software and have a strong reputation.  H&R Block also offers online software to aid SMBs, and Taxbrain is another trusted solution. 

Tax season, by nature, is a difficult and stressful time for most business people.  No single method of tax preparation is best for everyone, so make sure to think about how your company is going to file as there are pros and cons to all methods.  Consider your budget, timeframe, and confidence level when making a decision.