It’s coming, looming closer and closer with each passing day. The dreaded tax filing season is in full swing, and, we’ll bet, it’s already giving a number of business owners more than their fair share of headaches.

As a small business, you’re already overwhelmed. You run your business, take care of your employees, manage your client relationships, and focus on your services or products. Where does keeping track of IRS changes for small business taxes fit into your schedule?

One of the major obstacles for small business owners is knowing and understanding tax law because of its ever-changing nature and the amount of time it takes to stay on top of it. Startups in particular experience quite the shock when the full scale of their tax requirements becomes clear.

In addition to the federal income tax, businesses also face various types of state and local taxes, including income, franchise and/or sales taxes. If they have employees, they must deal with payroll taxes – including payments and information filings to the government and their employees.

Many businesses also face specific excise taxes. Even the type of business entity you’ve chosen (sole proprietor, partnership, LLC) affects your taxes. Too often, small businesses overlook important details or misfile some of these tax responsibilities.

Some important reminders:

  • Keep good records
  • Plan for paying taxes throughout the year, set aside the funds you’ll need before they come due
  • Make sure you classify your employees properly – classifying employees as contractors leads to trouble
  • Follow the IRS guidelines carefully to avoid potential fines and penalties

There are many tools out there attempting to assist small business owners track required activities. The IRS publishes a small business tax calendar every year (here’s the link to the handy interactive copy of the tax calendar online). You can also subscribe to the tax calendar in your outlook calendar.

As a small business owner, you’re probably a do-it-yourselfer, after all, there’s lots of software packages available for tax filing. However, if maneuvering the gauntlet of allowable deductions and proper filing for maximizing your tax reductions is daunting, it might be smarter to focus on what you do best and hire a professional who specializes in small businesses to prepare your taxes. Especially as small business taxes are never one-time shots, a tax professional can keep track of the constant deadlines and requirements for you.

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