Setting Up Your New Business for Tax Time

Posted by: Rod Kurtz on December 4, 2006

It’s never too early to start thinking about how to reduce your tax burden. Startups are especially poised to make decisions that can help save them time and money on Apr. 15. Following these tips will make getting ready for tax season less stressful:

• Open a separate checking account for the business.

• Then keep all of your business expenses separate by paying for them only from the business checking account. And don’t pay for anything nonbusiness-related from this account.

• Buy accounting software to help maintain control of your records.

• Think about how your business entity structure can affect your liability, and consider if you need additional insurance.

Keith Hall
National Tax Advisory
National Association for the Self-Employed
Grapevine, Tex.

Reader Comments

Chris M

December 5, 2006 4:00 PM

If you bill by the hour I can recommend Time59 (www.time59.com). It's a web-based application which greatly simplifies the monthly grind of time tracking and invoicing.

Daniel

February 5, 2008 8:32 PM

I have a small computer business and I was wondering if it would be a good idea to open a separate interest bearing savings account where I can deposit the monthly calculated taxes. When tax time rolls around, it would have accrued money while my operating capital maintains a stable about of funds. What do you think?

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