Tax season is in full swing and that April 18th deadline is coming quickly. If you missed the boat on setting financial new years resolutions (or maybe you fell off the boat and need to get back on), here are a few ways to revamp and get yourself and your business financially fit during tax season:
- Close out the 2015 year. A lot of taxpayers don’t actually know where they stand for the previous year until they get their taxes done. Even though you’ve still got a month left to file, it’s best to get your taxes done as soon as possible so you know your income and expenses for the previous year. Gather up your receipts and invoices and make an appointment with your accountant so you can officially close the books on 2015.
- Be smart with your refund. Make a plan for what you’ll do with your refund before it hits your account. It’s too easy to just spend it away if you don’t have a spending/savings plan beforehand. Write down your goal so you’ll stick to it. Here are a few ways to invest your refund back into your business. On the other hand, if you owe taxes to the IRS, get them paid ASAP. You don’t want a looming tax bill all year long, although you can set up a payment plan with the IRS if you need to. Pay as much as you can as soon as you can, and plan to set aside money along the way next year so you’re not hit with a big bill next tax season.
- Pay yourself first. As a business owner, it’s easy to take care of everyone else and every other expense and then not have a paycheck at the end of the month. Rather than just keeping what’s left over as your paycheck, set yourself a salary and try to follow it as closely as possible. This also makes tax season a little less of a headache.
- Create a plan for the remainder of the year. If you didn’t create a plan in January, now is the time! You’ll know where you stand financially after you get your taxes done, so you can budget accordingly for the rest of the year. You may decide you only want to create your budget a month at a time, which is fine, but be sure to keep the big picture in mind as well. Here are a few tips on creating a simple budget for your small business.
- Find ways to save money. Again, now that you know where you stand this tax season, dig a little deeper into your budget and find ways to save money. Cut out unnecessary costs and get your spending on track. The best way to do this is to keep meticulous track of all expenses for a month or two, and adjust accordingly.
How are you getting financially fit this tax season? We’d love to hear in the comment below!
FAQs:
1. Why is it important to close out the 2015 year for taxes?
Closing out the previous year helps you understand your financial standing and prepare accurate tax filings based on income and expenses.
2. What should I do with my tax refund?
Have a plan in place before receiving your refund to avoid impulsive spending. Consider reinvesting it into your business or paying off debts to enhance financial stability.
3. What if I owe taxes to the IRS?
If you owe taxes, prioritize payment to avoid accumulating interest and penalties. Setting up a payment plan with the IRS can help manage the burden.
4. Why is paying myself first important as a business owner?
Prioritizing your salary ensures financial stability and helps streamline tax obligations, making tax season less stressful.
5. How can I create a budget for the remainder of the year?
After assessing your financial status post-tax season, develop a comprehensive budget considering both short-term and long-term goals. Regularly monitor and adjust as needed to stay on track.
