Hi Community!
I recently sat down with Tony Martinez and Carlos Lopez from the Latino Tax Professionals Association. They gave me a lot of great tips for business owners about preparing taxes. Keep reading for more on common mistakes, tips for tax season, and access to a small business packet to get you started.
A Little Background
Latino Tax Pro provides online trainings in both Spanish and English for tax professionals and accountants. Their organization has over 12,000 members who attend in-person events and do online trainings. In short - Tony and Carlos experts on all things tax-related, and their organization is doing some really great work educating tax professionals around the country.
Plus, they’re very community-minded and want to make sure the businesses their members serve have all the information they need to be successful.
Common Mistakes
According to Tony, one of the most common issues that comes up is the categorization of employees vs. independent contractors. Some things to think about if you’re trying to figure this out: who controls how they perform their work? Who sets their schedule? Who trains them? And who takes the risk if there’s a workplace injury? Check out this site for more information on independent contractors vs. employees.
The other common thing that comes up for new businesses is selecting the correct form of business entity to establish. Common business entities have names like “sole proprietorship”, “corporation”, and “S corporation.” Each type of business comes with a specific set of tax implications - so it’s definitely something to look into. Find out more about business structures.
Tips
Tony and Carlos also had a few great tips to share from their years of experience helping business owners prepare for tax time.
1. Get organized.
- Set aside time weekly or monthly to sort through physical receipts. Without a dedicated time for this, it can easily become a mess and make your life needlessly complicated.
- Consider using QuickBooks to stay organized (keep in mind Square integrates with QuickBooks!)
- Keep income and expenses separate - even if it’s as basic as putting all documentation for income in one box and all receipts for expenses in another box.
- Even better than two boxes for paper receipts - invest in a good scanner to digitize your receipts and keep them all in a file on your computer.
2. Hire help if you need it.
- This is the other big tip that Carlos and Tony had for me - as a small business owner, you may be great at being a chef or running a clothing boutique, but doing your taxes may not be your idea of a lovely afternoon. If that’s the case, ask for help! Find an accountant and/or tax professional who you trust.
Resources
Latino Tax Pro was kind enough to share this Small Business Packet with me to give to all of you. This packet is a super helpful starting point to help guide you through the maze of local, state, and federal agencies involved with tax season.
A few screenshots from the packet:
I’d also recommend that you check out these steps for tax filing season from the IRS. There’s a wealth of information here about ITIN, Refunds, and how to find help. We also have more information available for how tax season works with Square.
Disclaimer: As with all our of our posts, this content contains general information and guidance only, and is not a substitute for legal or tax advice. For advice specific to your area or business, be sure to consult with a qualified professional.
What tips do you have for staying on top of your paperwork for tax season? How do you stay organized throughout the year?
