The new year is here, and it's time to turn your attention to one of the most critical aspects of running a successful business: taxes. While the April filing deadline may still seem far off, getting a head start can save you from last-minute stress and position your business to take advantage of future financial opportunities such as grants and loans. Accurate and timely tax filing isn't just a compliance issue—it's a strategic move that can open doors to valuable resources and funding.
To help you navigate this vital process, The Source has partnered with the Southland Development Authority, one of our trusted Business Support Organizations, to share some helpful tips to ensure you're prepared for the 2025 tax season.
Tip #1: Always File Your Taxes
Let’s get straight to it: filing your taxes is essential. To be a successful small business owner, having up-to-date tax returns isn’t just a good practice – it’s a necessity. Whether you’re considering a loan, pursuing credit lines, or applying for a grant, these opportunities will require your most recent tax returns.
For example, the 2023 Source Grant program, which distributed $50 million in grant funds to small businesses throughout Cook County. Sadly, hundreds of applicants were disqualified over one detail – they didn’t have current or complete tax returns.
Get your financial ducks in a row and ensure you're always prepared to seize future capital opportunities by completing and filing your taxes every year.
Tip #2: Consider seeking professional help, sooner rather than later
When it comes to taxes, the stakes are high. Mistakes or oversights can lead to penalties, lost opportunities, or even audits. For small business owners, working with a tax professional not only helps save time, but can also assist in maximizing the available benefits for your small business, and offer opportunities for strategic guidance. The following situations may significantly increase a business's need to consult a tax professional:
- Expanding to multiple locations or jurisdictions.
- Navigating complex tax laws related to employees, contractors, or business structures.
- Addressing audits or additional IRS communications.
The good news? Investing in professional guidance can often save you more money in the long run by optimizing your current tax standing.
Tip #3: Stay Organized and On Top of Your Records
To maintain accurate and up-to-date records, small businesses should implement the following strategies:
- Use digital tools: Tools like QuickBooks can help track income and expenses efficiently. They can also generate reports that are vital during tax season.
- Separate personal and business expenses: Make sure to have separate bank accounts and credit cards for business expenses. This minimizes confusion and ensures accurate reporting.
- Regularly update records: Set aside time at least once a month to review and update financial records. Keeping current records reduces the risk of errors and minimizes stress come tax time.
- Keep receipts and documentation: Try to maintain digital copies of all receipts, invoices, and financial statements.
Accurate and comprehensive records not only ensure smooth tax filing but also help keep your business in good standing to act fast on financial opportunities that necessitate up-to-date documentation. Should you need assistance in setting up an efficient recordkeeping system, always consult with a professional.
Tip #4: Maximize Tax Deductions for Your Small Business
Understanding and applying the right tax deductions can significantly reduce your tax burden. Don’t leave crucial assets on the table, explore the following:
- Consult the IRS website: Stay informed about common business deductions and updates specific to your industry.
- Explore industry-specific resources: Many industries have specific deductions (e.g., home office, vehicle expenses, business meals) that are often detailed by industry associations or trade groups.
- Utilize tax software: If you prefer a more hands-on approach, tax software tools can help you identify deductions as they apply to your situation.
- And yes, if in doubt, seek professional guidance: A tax professional can help identify and ensure that you're maximizing your deductions.
The Source proudly partners with a wide network of local business support organizations, including the Southland Development Authority, to empower small businesses across Cook County. Through The Source, you can access free, personalized business advice from dedicated business advisors like those at the SDA. Advisors offer ongoing support and can help connect you with trusted local tax professionals to keep your business financially stable and ready to seize every opportunity that comes your way.
Don’t wait—sign up today and get a head start on a stress-free tax season!