The end of the year brings with it the first thoughts of the upcoming tax season for small business owners. Tax season, in the early part of the year, brings with it a very unique paradox. By the time you sit down to look at your taxes for the year prior, it’s too late to do anything to better prepare your business for them.
I reached out to wedding photography editing company, ShootDotEdit, to share about this topic that sneaks up on business owners each year. Keep reading to learn a few important items to work on now to set yourself up for success once tax season is here.
At ShootDotEdit, we help wedding photographers with post production and share tips to assist in business growth. Some of the things you get to do as a photographer and business owner are thrilling and allow you to stretch your creative muscles. Other parts of your role as owner are unappealing for most, like the upcoming tax season. Taxes are probably the last thing you want to think about while you’re enjoying the holiday season, but they are a necessary part of your business. To make it as pain-free as possible, we’ve put together 4 tax items you should take care of before the year is over.
*Disclaimer: Tax laws very state by state. You should always consult a tax professional to get specific advice for your business.
1. Prepare for Estimated Tax Payments
One of the first items to take care of is to prepare for estimated tax payments. Since tax law varies, do your research to find out whether you need to make these payments, or if you are exempt. Most business owners must pay this, but knowing for sure can help in your planning. To prepare yourself, continue to research how much you will pay in estimated tax payments. This is one thing you do not want to be a surprise, so try to get as close as possible with the number you will owe.
2. Gather Contact Info
The next item to consider is to ensure you have accurate information for all contractors or employees. This includes their current address and phone number, so you can send them the proper documents when the time comes. Gather this information before the year is over, so you can avoid any complications or issues once tax season is here. Nothing is worse than having to worry about what to do when you accidentally send a 1099 form to the wrong address, especially when you have so much else on your plate.
3. Catch Up on Bookkeeping
Another item on your list to take care of is to catch up on bookkeeping. During busy season, it can be difficult to keep track of all paperwork, invoices, and other information from your clients. Catch up on bookkeeping now to avoid stress and headaches around tax time. If you have not started on your bookkeeping, set a deadline to keep yourself motivated. You could also hire someone to take care of your bookkeeping if it is something you do not want to handle.
4. Plan Ahead
A final item to prepare before the end of the year is to think and plan ahead for any big expenditures you need to make for your business. This can include new gear, remodeling of your studio, or taking on a separate business venture. Keep in mind, some items can be counted as a tax deduction for this year. If you plan to make a large purchase of new gear, consider buying it this year to take advantage of the deduction when you file your taxes. The more you plan ahead, the easier it will be to know what you owe (and what you can benefit from on your taxes).
When you start with these items, you will have an easier (and less stressful) time with your taxes next year. What else can you do to prepare your business for next year? Our Guide, How to Grow Your Wedding Photography Business, contains 50+ pages of actionable tips and tricks to help you focus on what’s most important to work on in your business.
Download your free copy today!