7 Small Business Tax Tools and Resources
These seven tools and resources can help simplify and organize your business finances and make tax time easier to bear.
1. Sage Accounting
The ultimate goal, of course, is to keep as much of your money as you can. The trick to that is a disciplined approach to accounting for expenses, notes Jennifer Warawa, vice president and general manager for Sage Accountant Solutions at Sage North America.
Figure 1: Sage 50 Accounting keeps tabs on all your business expenses so you'll have your deductions all lined up come tax time.
"The biggest mistake small business owners make is not keeping track of their expenses throughout the year," says Warawa. "Trying to gather every receipt or sorting through a shoebox of receipts when it's time to file is highly inefficient and can make tax time even more stressful and potentially more costly. The bottom line is you can't deduct what you can't document, and failing to record as you go most likely means you're forgetting expenses and leaving money on the table."
An accounting package is key to this record-keeping, and Sage 50 Accounting (starting at $269 per year) is tailored to small businesses. Sage 50 lets you track all the money that comes into your business and all the money that goes out, with invoicing, bill pay, and inventory management. It also handles payroll processing, and tracks your payroll taxes so you are always in compliance.
Prefer a cloud solution? Then consider Sage One (starting at $14 per month). It offers invoicing, quote generation, contact management, bank integration and, of course, income/expense management in a convenient no-installation, access-from-anywhere platform.
2. Neat Smart Organization System
You can also track potential deductions by digitizing receipts, which makes them easier to organize and find come tax time. That's where the Neat Smart Organization System ($399.95) comes in.
Figure 2: The NeatDesk Scanner works with the included desktop software to capture paper documents (like receipts), file them, and make them instantly searchable.
The solution encompasses the NeatDesk scanner and desktop software (available for both Windows and Mac), plus the company's Neat Cloud Service for storing and accessing files in the cloud. There's even a mobile app component that lets you capture expense receipts on the go.
The software's InDocument Identification Technology automatically reads and extracts key information from your captured documents and virtually eliminates manual data entry. Plus, when you enter a receipt into Neat you can assign it a tax category to make IRS filing faster. Neat supports U.S. and Canadian tax categories for schedules A, B, C, D, E and F, and for various forms including 2106, 2441 and others.
The Neat system's fully customizable folder structure lets you build your folders in a way that works for you. And as tax time approaches, you can share those folders with your accountant.
You might want to consider FileThis, an organizational tool that ranges from free to $5 per month. This online service automatically fetches your important documents (such as statements and tax forms) from leading third-party companies like American Express, Chase, Amazon, Fidelity and dozens more—no more logging on to those sites individually—and files them accurately in one convenient place.
Figure 3: The FileThis service collects pertinent tax documents and online statements in one place.
You can send documents to a secure FileThis Cloud repository or to your preferred cloud storage provider, such as Evernote, Box, Dropbox, Google Drive and so on. It also converts collected documents to searchable PDF files, which lets you find what you are looking for and view files on just about any device.
4. ACA Advantage
The new IRS reporting requirements associated with the Affordable Care Act will likely create confusion among small business owners. First Advantage Tax Consulting, a nationwide provider that develops and implements strategies to reduce clients' tax liabilities, recently launched the ACA Advantage Self-Service Solution to help small business owners navigate the ACA's shoals.
The tool is built to ease the administrative burden many small businesses will face to attain (and sustain) compliance with the ACA Employer Mandate. It will also help them to efficiently and effectively fulfill the extensive IRS reporting requirements. And in addition to assisting with ACA compliance, the technology powering the tool compiles and tracks copious amounts of detailed data useful for talent management, benefits and tax compliance.
Convenient features include automatic alerts when individual employees hit key compliance thresholds and easy-to-generate and interpret trending reports that warn of emerging compliance threats before they trigger penalties.
For many small business owners, processing 1099 and W-2 forms can be cumbersome and time-consuming. EFile4Biz eliminates the hassle by delivering comprehensive front-to-back form processing, starting at around $2.00 to $3.00 per form for small businesses. The online service handles printing, mailing and optional electronic delivery to recipients, as well as electronic filing with the IRS and Social Security Administration. It also integrates with leading accounting applications and services so you don't have to re-enter employee and wage information.
6. Intuit TurboTax
There's no sugarcoating it: Intuit unleashed a malestrom when it revamped its perennially popular TurboTax line. Their sin (according to legions of bloggers and online product reviewers) was removing the all-important Schedule C from the entry-level versions of the product, hence requiring sole proprietors and small businesses to step up to the more full-featured (and expensive) edition.
However, most small business owners in the do-it-yourself crowd likely already use Intuit's TurboTax Home & Business edition where the Schedule C resides, so the dust-up probably doesn't affect your plans. But it has worked to your advantage; to appease the online masses, Intuit dropped the price of TurboTax Home & Business from $104.99 to $79.99.
As before, TurboTax Home & Business will import last year's tax data from TurboTax and other tax-prep packages, so you don't have to re-enter things like your personal information and relevant business stats from scratch. It also uses last year's data as a sanity check to show you side-by-side what you told the IRS last year and what you're telling them this year.
You can plow through the forms manually, or let the program guide you through its step-by-step "interview" process, where you provide answers to straightforward questions and the software plugs the numbers into the appropriate forms in the background. TurboTax Home & Business can handle any 1099-MISC income (such as from consulting work) you might have, any rental property income, and of course the all-important small business income and expenses. It even includes both online-chat and phone tech support with U.S.-based operators.
And we would be remiss if we didn't give props to the good people at the IRS who try to make things easier for small business filers. Check out the Small Business and Self-Employed Tax Center area of the IRS.gov site, where you'll find a synopsis of changes for the given tax year, forms, webinars on topics pertinent to small business owners, as well as an A-to-Z index of topics.
Jamie Bsales is an award-winning technology writer and editor with more than 20 years of experience covering the latest hardware, software and Internet products and services.
|Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!|