1 Set up a separate business bank account. This will help you keep your personal and business finances separate, which will make it easier to track your business income and expenses.
2 Keep accurate records of all your business income and expenses. This includes things like sales receipts, invoices, bank statements, and credit card statements. You can use a variety of tools to track your finances, such as accounting software or a spreadsheet.
3 Estimate your quarterly tax payments. As a startup business, you will be required to make estimated tax payments throughout the year. You can use the IRS’s Estimated Tax Calculator to help you estimate your payments.
4 Hire a tax professional. If you are not comfortable preparing your own taxes, you should hire a tax professional to help you. A tax professional can help you ensure that you are paying the correct amount of taxes and that you are taking advantage of all of the deductions and credits that you are eligible for.
5 File your taxes on time. The deadline for filing federal income taxes is April 15th each year. If you are unable to file your taxes on time, you can request an extension from the IRS.
6 Pay your taxes on time. If you cannot pay your taxes in full on time, you may be able to set up a payment plan with the IRS.
7 Be aware of the tax implications of your business decisions. For example, if you are thinking about incorporating your business, you should be aware of the different tax implications of different business structures.
8 Take advantage of tax deductions and credits. There are a number of tax deductions and credits that startup businesses may be eligible for. For example, you may be able to deduct the cost of starting your business, such as the cost of legal fees and advertising. You may also be eligible for the research and development tax credit or the work opportunity tax credit.
9 Keep up with the latest tax changes. The tax laws change frequently, so it is important to keep up with the latest changes. You can visit the IRS website or subscribe to IRS tax publications to stay up-to-date on the latest tax changes.
10 Be prepared for an audit. The IRS audits a small percentage of businesses each year. If you are audited, you will need to provide documentation to support your tax deductions and credits.