Tax season is here, so your fleet is busy gathering documents and crunching numbers. Do you find that tax season is stressful every year? It doesn’t have to be. If you keep taxes in mind all year, you’ll find that things come easier than ever when it comes time to do your taxes. Here are six tips to simplify filing taxes for your business.
No. 1: Develop a System for Bookkeeping
Unfortunately, the trucking industry is notorious for letting their books escape them. Organization is a critical tool that your fleet must develop if you want to make tax season easier. You can use accounting software to simplify that process and take much of the stress off your back. Azuga’s fleet management software connects with QuickBooks, so you can easily transfer all of your information and get accurate, up-to-date data at the click of a button.
No. 2: Avoid Fines by Making Quarterly Estimated Tax Payments
While paying taxes quarterly may sound like a nightmare, it can greatly benefit you. The IRS requires businesses and independent contractors to make tax payments each quarter. This means you won’t have to write a huge check to pay the IRS at the end of the year. If you miss these payments, you could face significant fines come April 15th.
No. 3: Accurately Report Your Income
Of course, this sounds like a no-brainer. But you’d be surprised how many people fall into the trap of underreporting income. The last thing you want to do is trigger an audit. You may think you won’t be caught, but if you’re showing that you brought in $500,000 and another company reports that it brought in $750,000 on their 1099, you may find yourself in trouble.
No. 4: Verify Your Type of Business Entity
This aspect seems like a no-brainer, but you’d be surprised to learn that it can be quite a challenge. Some fleets think that they’re considered an S-Corp, but they’re actually considered an LLC. A fleet might file the wrong type of return for years before they catch their mistake, and that can mean that you’re missing out on deductions or paying a higher bill than you need to.
No. 5: Be Aware of the Difference Between Income and Repayment of Shareholder/Owner Contribution
When businesses start, they may fund the business personally until it generates its own income. That loan has already been taxed when those personal funds are paid back. When owners take money out of the business, that is not income; that is a repayment of the initial shareholder or owner contribution.
No. 6: Use an Accountant Familiar with the Trucking Industry
When seeking out accounting experts, you should always find one familiar with your industry. This applies to any business, but trucking in particular. Trucking businesses have specific needs you don’t want to entrust to an accountant who hasn’t dealt with truckers before. Make sure you are covered by hiring an expert in the field.
Get Everything in Order with Azuga
Azuga can’t file your taxes for you, but we can get you all the data you need to make the process easier. We help you track your drivers, invoices, and billing so that you ensure everything you bill is accurate, and all your invoices are in the right place. Never worry about losing your documents again, because everything is housed digitally in Azuga’s system. This system links to QuickBooks, so you can transfer everything immediately when you’re ready to file taxes! Discuss your bookkeeping needs with an Azuga expert today to see what we can accomplish together.