This fall, San Antonio accountants will be busy helping new business owners make the best possible start. A major component of setting up a new business is preparing a strong foundation for tax time. Here are some things to consider:

• Set up an organized accounting system right from the start. Open a separate checking account for your business and keep accurate records of all income and expenses. If you use credit or debit cards, get a separate one for the business.
• Choose an accounting method. The cash method is the simplest to use, especially for small businesses and individuals. Your income and expenses are claimed on your taxes for the year in which you received or made them. Nothing is held back or carried over to the next year. The accrual method is more complex. It allows you to account for income in the year you earned it, even if you didn’t receive it yet.
• Decide on the form of your business. Options include sole proprietorship, LLC and S Corporation. Sole proprietorships are businesses in which you earn and receive all the income, take on all the risk and are personally liable for any debts. Income is reported on your personal tax return. LLC stands for Limited Liability Corporation. This separates your personal and business affairs and gives you some personal protection from lawsuits and business debts. You can own an LLC by yourself or with others. S Corporations are larger entities that have shareholders who receive income from the business.
• Learn about available tax credits for small businesses. Your legitimate business expenses are deductible on your taxes, so save all receipts and keep careful records. Other credits include Employer-Provided Child Care Credit and Disabled Access Credit. Consult with a qualified CPA to learn more.
• Be prepared to pay self-employment taxes and quarterly income taxes. 15.3% of your business income is taxable for Medicare and Social Security. You must pay it yourself as self-employment tax, since you don’t have an employer taking it out of your paychecks. Making quarterly estimated income tax payments will help you avoid a big bill at the end of the year.

A qualified CPA specializing in small business taxes can help you set up your venture and advise you on current tax requirements. To get the best tax advice for your new business, call Gonzales Group CPA at 210-366-9430 and talk to one of our expert San Antonio accountants.

Categorised in: Business Tips, Finance Info, IRS Tips, San Antonio Tx Tips, Tax Info

This post was written by Gonzales Group CPA