Want to avoid a headache when tax season hits? Start prepping now for next year’s taxes. By changing the way you manage your business records, you could get your window cleaning company ready for the beginning of the year. Here are some quick tax tips to make filing taxes a more pleasant experience in the future.
Nearly every single item that you buy for your business can be considered a tax deduction. This doesn’t just refer to window cleaning supplies either. It includes business lunches with potential new clients and even the vehicle you use to get to job sites. Keep all of your receipts for these purchases so that you can add them up for tax deductions at the end of the year. You may also want to use a business credit card to make your purchases so the transactions are all easy to look at. The more receipts you have, the more money you will save.
Most self-employed people make estimated tax payments every quarter to avoid having a big bill to cover at the end of the year. These payments are designed to take the pressure of you when tax season hits so you’re not overwhelmed by tax debt. You do not have to make these quarterly payments, but you will be in a much better position financially if you do. Otherwise, you will need to save money throughout the year to cover your costs.
One of the best accounting strategies for window cleaning companies is to split your money as follows:
Try to put aside at least 1/6th of your earnings for your taxes every time you get paid. This is tough to do, especially when you have bills to pay, but that is about what you will owe the government at the end of the year. If you have the money sitting in an account, ready to go, you won’t have to worry as much when you file your self-employment tax return.
Watch out for even more helpful tips in Part 5, where we discuss how to minimize your tax debts next year.