Preparing your business properly is critical to your success, especially during tax season. These practical tips can help you get a handle on your taxes and your overall business finances during tax season and beyond.

9 steps to get your business ready for tax season

1. Know your federal and state tax obligations

Tax requirements vary by state and can change depending on the structure of your business, so you’ll need to do some research and find out how to calculate your state and federal taxes. The IRS Small Business and Self-Employed Tax Center can help you determine what federal taxes you owe, while information about state taxes can be found on your state’s Department of Revenue website.

2. Understand Employment Taxes

Employment taxes include Social Security and Medicare Taxes, federal income tax withholding, and federal unemployment (FUTA) tax. To learn more about these taxes and access resources, you can visit the Small Business Tax Employment page on the IRS’s website.

3. Identify Required Tax Forms

Different business types require different IRS forms. Determine early which documents you’ll need so you can gather information in advance rather than rushing at the last minute.

4. Review Credits and Deductions 

Visit the IRS’s website for credits and deductions for businesses to get familiar with small business tax deductions and figure out which ones your business can benefit from.

5. Find out when taxes are due ahead of time. 

Learn when your taxes will be due and plan to make the payments on time or early. The IRS tax calendar can help you track when payments are due and can even send you email reminders a week or two before payment due dates.

6. Separate Business and Personal Finances

Separating your finances is worth the effort. Not only will it be easier to sort through your income and expenses as you prepare your taxes each year, but it will make the audit process much smoother should you ever be subject to one.

7. Take a year-round approach to taxes.

Creating good habits throughout the year will help you avoid struggling to get all your paperwork and payments together at the last minute. Make an effort to track your expenses, digitize receipts, and invest in software to improve your record keeping and facilitate accurate tax payments made on time. Keep any business documents you’ll need for your tax returns in a special folder to have them ready come tax season.

8. Seek an expert and hire an accountant. 

Hiring a qualified accountant or tax preparer is a wise business investment that can help your business thrive and even save you money in the long run. Search BBB.org to find BBB Accredited accountants. You can also check the American Institute of CPA’s directory to find licensed CPAs.

9. Watch for Tax Scams

Always carefully guard your sensitive tax, business, and personal information and learn how the IRS works to avoid being fooled. Call the IRS directly to verify if you’re ever in doubt about whether something is a scam. You can also monitor the IRS’s tax scams and consumer alerts page to be updated on the most recent tax scams. You may also look to the “How to avoid tax scams” and “Watch out for fake government compliance notices targeting businesses” articles by The BBB.

To report or review scams, visit BBB Scam Tracker at: https://www.bbb.org/scamtracker for more Information

To review this article and hyperlinked references in full, visit: https://www.bbb.org/all/taxtips/us/getting-your-business-ready-for-tax-season-us

For additional business news and guidance, visit: https://www.bbb.org