Worried about tax time? Business expert Barbara Weltman discusses how she handles her small business taxes.
When it comes to business, you’re required to keep books and records, but how you do it is up to you. And your choices basically are getting software, or using a cloud solution. There are a number of factors to take into account in making your choice. There’s no right way. It depends what, what you prefer. For example, if you have software, you pay for it up front, and usually you have to replace it every several years as updates come out. In contrast with a cloud solution, you’re going to be paying a monthly fee, but the updates are obviously included. Another consideration is data protection. If you use software, it’s up to you to back up your data to protect your financial information, as you would any other information for your business. In contrast with a cloud solution, the information resides in the cloud. So in other words, backup is automatic. Whichever solution you use, figure out who’s gonna be handling it. Are you gonna be inputting the information? Are you gonna use a bookkeeper who’s on your payroll? Is your CPA gonna do it? Are you gonna outsource it to a firm specifically to handle this kind of thing? So, once you have the solution that you prefer, then figure out who’s gonna do it. If you do business in a state that has a sales tax, determine what it means for your business, whether you’re going to have to be collecting the tax on the goods or services that you provide. If you sell online, you may be required to collect sales tax on sales that you make in another state, on those remote sales. So, figure out your responsibilities for that as well. You can get your state ID or sales tax number from your state revenue department. The better your records are, the less costly it’s going to be for you at tax time.