Year-end tax tips can reduce stress

The calendar year is almost over. Many business owners are already fretting about preparing for their 2016 tax returns. If you don’t feel confident that your financial records are in order, here are some tips to avoid stress.

l KEEP THE PAPER UNDER CONTROL. Don’t let paper overtake your world. Ideal management would be a scanning system that organizes the electronic versions of every receipt or invoice. If you can’t switch to an electronic system, don’t let that fact stop you from organizing. Cardboard banker boxes and file folders from the office supply store can put things in order. Fancy labels are great but a handwritten label is better than nothing. Organizing by month is a simple way to start.

l BALANCE THE CHECKBOOKS. You’ll want to have your bank statements in one spot so that you can document expenditures such as online transfers or employee paychecks. If your bank offers online documentation, you’ve saved yourself hours of paperwork. A “best practice” is to review the transactions every few days so you can detect fraud or theft immediately. Banks have specific time limits for reporting discrepancies and online access is an excellent tool to track account activity in real time.

l BE AWARE OF THE AMOUNT OF ANY TAXES THAT YOU MIGHT OWE. It is frightening to see a completed tax return in April and have a large amount due if you haven’t planned for that expense. High revenue in December is typical for many small businesses, which translates into higher profits and more taxes due. Only an ostrich should bury its head in the sand.

l TALK TO YOUR TAX PROFESSIONAL ABOUT A STRATEGY TO REDUCE YOUR TAXES. This isn’t a recommendation to hide income; it’s a suggestion to consider how timing of payments, investments in depreciable equipment or other legitimate business moves can lower your tax bill.

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Running a small business can be exciting but very stressful as well. That’s a lesson learned by Diony Lopez and An Nguyen who have been interns in the Louisiana Small Business Development Center at McNeese for the fall semester. They are two of the many students working on a Master of Business Administration degree at McNeese.

In the reports prepared at the end of their internships, Lopez and Nguyen noted that their perspectives have changed due to interaction with entrepreneurs. The students were impressed by the passion shown by people who are working very hard to start a small company and amazed by how much is involved in running a small business. Lopez and Nguyen believe that they are much more prepared for employment in the business world thanks to their experience with the LSBDC at McNeese.

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The business consultants at the LSBDC at McNeese are ready to talk with you. Call 337-475-5529 to schedule an appointment with an experienced professional for no-cost assistance. For over 30 years, the LSBDC at McNeese has worked with entrepreneurs and business owners who are looking to start or grow their small business. Visit www.lsbdc.org/ msu to learn more about us.

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DONNA LITTLE is the director of the Louisiana Small Business Development Center at McNeese State University. Contact her at 475-5945 or dlittle@lsbdc.org.

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Funded in part through a Cooperative Agreement with the U.S. Small Business Administration and Louisiana Department of Economic Development. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA.