Are You Up to Date on Changes to 2013 Small Business Taxes?
by Liz Hester, Staples® Contributing Writer
Many small business owners dread tax season and the headaches that come with trying to navigate changes to the Internal Revenue Service (IRS) rules. Be sure youre aware of the changes to small business taxes that proprietors should know as they get ready to settle their 2013 tax bills.
Whats New for 2013 Taxes
While you should consult a professional to make sure you know the latest rules before filing your 2013 tax forms, here are some highlights:
Contract Workers: Though not new for Tax Year 2013, businesses that use contract workers must file the appropriate form 1099 for those they pay more than $600. The IRS has been aggressive about assessing penalties, Gohlke says. There are some rules to be aware of. Ignoring them can cost you. Talk to your accounting professional in early January if you hire contractors.
Self-Employment Taxes: For those filing self-employed taxes, separating business from personal expenses can be a hassle, especially when starting out. The key is having separate accounts and staying organized, says Peter Bacon of deButts, Campbell & Roberts in Raleigh, NC. Make sure your personal is your personal and your business is your business, he cautions. Dont mingle.
The ACA: Its never too early to start thinking about filing taxes for 2014, especially given the changes coming to healthcare from the Affordable Care Act. While there are no accounting or tax-related changes that apply to Tax Year 2013, employers need to make sure they provide coverage in 2014 or correctly calculate the penalty if they fall under the new rules. Sitting down with a tax advisor early in the year ensures a good understanding of the rules for 2014.
Leslie Pierson, founder of Retrofitted Designs in Seattle, WA, uses QuickBooks to organize her income and expenses, and outsources her payroll. She says hiring someone to get the payroll taxes correct gives her peace of mind and ensures shes complying with withholding laws. She suggests hiring a professional bookkeeper to get the software set up correctly, and for small business owners to review all transactions to make sure theyre entered properly.
The easiest way to keep it all straight, however, may be to outsource taxes completely. David Sonntag, president of Decibel Management in Wake Forest, NC, hired a business advisor to manage his finances so he could focus on running his event management firm and not having to learn new accounting rules.
Make sure youre up to date and in compliance with changes to tax law by meeting as soon as possible with your accountant or financial advisor. Thats a smart resolution to make for the new business year.