Seven Business Mentoring Tips: How to Survive Paying Taxes

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Ben
Franklin gave timeless small business advice when he proclaimed that there were
only two certainties in life: death and taxes.  But you don’t have to let
your tax responsibilities drive you and your business to an early grave. Here
are seven tips from a business mentoring expert on how to survive paying taxes.

“Death and Taxes.” 
Ben Franklin gave timeless small business advice when he proclaimed that they
are the only two things in life that are certain.  But you don’t have to
let your tax responsibilities drive you and your business to an early grave.

As a business coach, the
one problem I see many entrepreneurs running into is failing to budget enough money
to set aside for their taxes.  Then when it comes time to file their taxes,
they don’t have the cash. Unfortunately, not filing taxes is NOT the solution
to the problem!

The following business
mentoring tips are among some of the best pieces of bookkeeping business
advice that I have shared with busy entrepreneurs over the years. If you come
up short on cash at tax time, here are some things you can do:

Business Mentoring Tip
#1: Gather your records and file all your tax forms immediately, even if you
can’t pay a cent.

Business Mentoring Tip
#2: Write a letter and attach it to your forms explaining your financial
situation.  The IRS will work with you to find a payment option with which
you can live. One of those options could be setting up a plan so that taxes can
be paid in installments.

Business Mentoring Tip
#3: Have a solid business plan that makes accommodations for both federal and
state taxes, and stick to it.  The last thing a new business needs is to lose
its profits by paying penalties to the IRS.

Business Mentoring Tip
#4: Open a second bank account like a tax savings account, to be used
exclusively for saving money for paying taxes. As a business coach, I’ve seen
many clients successfully use this strategy.

Business Mentoring Tip
#5: Each time your write yourself a check or make a cash withdrawal from the
ATM, take 20% of that money and deposit it into your tax savings account. 
For example, for every $100, set $20 aside for taxes. You will be pleasantly
surprised how quickly your tax savings will add up!

Business Mentoring Tip
#6: Each quarter, January 15th, April 15th, June 15th and September 15th make
estimated tax payments to the Federal and State governments.

Business Mentoring Tip
#7: Each October meet with your tax preparer for preliminary tax planning. You
can evaluate where you are for the year and leave yourself ample time to reduce
your tax liability or make additional payments.

By
using this proven bookkeeping business advice and implementing these seven tips
into your business’s bookkeeping practicesFeature Articles, you will be able to survive paying
your taxes.