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Tax Tips for Small Businesses

Navigating Tax Season:
Seven Essential Tips for Small Businesses

March 4, 2024

As a community-focused bank, we understand the unique challenges that small businesses can face, especially during tax season. Preparing for taxes can be a daunting task, but with the right strategies and tools, you can manage this process efficiently. In this blog, we’ll share some essential tax tips to help your small business navigate this critical endeavor.

1. Organize Your Financial Records

The first step in preparing for tax season is to ensure that all your financial records are in order. This includes bank statements, invoices, receipts, and any other documents related to your business’ finances. Ridgewood Business Mastercard® Credit Cards offer the Receipt Management App that helps to streamline expense tracking.

2. Make Use of Payroll Services:

Efficient payroll management is crucial for small businesses. Utilizing reliable payroll services helps ensure accurate and timely employee payments and tax withholdings. This not only helps in maintaining employee satisfaction but also in keeping accurate records for tax purposes. According to the National Small Business Association Tax Survey, one-third of businesses with five or more employees spend more than six hours per month handling payroll taxes internally. Ridgewood has partnered with Paychex, the leading national payroll provider, and Paychex offers payroll solutions that can be integrated into your business practices seamlessly. Paychex can help calculate, deposit, and file your federal, state, and local payroll taxes with the appropriate tax agency to help you avoid penalties for late or inaccurate tax payments.

3. Leverage Credit Card Statements:

Business credit card statements can be invaluable resources for tax preparation. They provide a detailed record of your expenses, which can be useful for tracking deductible expenses. Make sure to review your credit card statements to ensure all business expenses are accounted for. Ridgewood Corporate Credit cards provide insightful reports to simplify oversight and gain valuable intelligence.

4. Optimize Point-of-Sale (POS) Solutions:

Modern POS systems do more than process transactions; they can track sales, inventory, and customer data. This information can be extremely helpful for tax reporting. If you’re using a POS system, ensure its set up to capture the necessary data for tax purposes. Ridgewood has a partnership with Heartland, an innovative payment and point of sale solution. Heartland’s back-office management solution simplifies the accounting process, and its all-in-one terminal provides you with the freedom to help you run your business better.

5. Seek Professional Advice:

While it's important to understand the basics, professional advice can be invaluable. Consulting with a tax professional provides personalized advice based on your specific business situation. A tax expert can advise small business owners about potential tax deductions that they might not be aware of, such as those related to office supplies, travel, and employee compensation. Additionally, they can provide insights into claiming deductions for interest payments on business-related credit cards and loans, further optimizing your financial strategy.

6. Stay Informed About Tax Credits:

Small businesses may be eligible for various tax credits, which can significantly reduce your tax liability. Examples include credits for energy efficiency, hiring certain employees, and research activities. Be sure to consult with your tax advisor to learn more.

7. Plan for Tax Payments:

If you expect to owe taxes, it’s wise to start planning for these payments well in advance. Ridgewood offers savings accounts including its Business Money Market and Business Savings as well as other financial products that can help you set aside funds for tax payments.

We at Ridgewood Savings Bank are committed to supporting small businesses in the community. By following these tips and making use of the right financial tools and services, you can approach tax season with confidence and ease. Remember, we’re here to help with all your business banking needs – from efficient payroll services to convenient credit card solutions. Let’s make this tax season a smooth and successful one for your business!

For more personalized guidance, feel free to contact our team or visit our local branch. We’re always here to support you in your business journey.